13 Oct 2012

IMF head backs more time for Greece

11:31 am on 13 October 2012

International Monetary Fund managing directer Christine Lagarde has backed calls for Greece to have more time to meet the targets of its bailout.

During a BBC debate in Tokyo on Friday, she said that this might be better than "frontloading heavily", or making Greece pay the most upfront.

But Germany, the biggest contributor to Greece's bailouts, rebuffed the idea.

"We have to stick to what we announced," Finance Minister Wolfgang Schaeuble replied.

Greece has asked for two more years to meet the spending cuts demanded by its lenders, the EU, European Central Bank and the IMF.

Ms Lagarde backs this request, but Mr Schaeuble stuck to Germany's previous line that Athens must be held to what it agreed on the terms of the 130 billion euro bailout - Greece's second since 2010.

At stake is whether Greece should receive the next tranche of the bailout, worth 31.5 billion euros. Without the funds, it risks running out of money by the end of next month.

The BBC reports Greece has argued that it has been through five years of recession already and cannot hope to meet its targets through cuts alone.

Germany is the biggest contributor to the European Stability Mechanism, a new bailout fund that will eventually have a full lending capacity of 500 billion euros by 2014.