Tsipras told deeper reforms needed as IMF also stresses need for debt relief

Greek Prime Minister Alexis Tsipras was left in no doubt on Thursday at the World Economic Forum in Davos, Switzerland, that his government will have to produce deeper pension reforms to satisfy its lenders.

However, Tsipras was also given backing over his pursuit of debt relief from the International Monetary Fund, whose role in the Greek bailout he had publicly questioned recently.

Tsipras met with IMF Managing Director Christine Lagarde and, earlier, with US Treasury Secretary Jack Lew. He also shared a panel with German Finance Minister Wolfgang Schaeuble.

During a 90-minute meeting described as “sincere” by the Greek side, Tsipras raised two key issues during his meeting with Lagarde. He asked for leaks from the IMF regarding its views on Greek proposals to stop and for the upcoming bailout review to be completed as quickly as possible.

In a statement issued after the meeting, the Fund made it clear that Tsipras would have to do more on pension cuts, while Greece’s European lenders would also have to be prepared to offer sizable debt relief to Athens.

“The managing director reiterated that the IMF stands ready to continue to support Greece in achieving robust economic growth and sustainable public finances through a credible and comprehensive medium-term economic program,” said the IMF.

“Such a program would require strong economic policies, not least pension reforms as well as significant debt relief from Greece’s European partners to ensure that debt is on a sustainable downward trajectory.”

Earlier, when he was part of a panel with Schaeuble, Tsipras said his government accepts the need to have the IMF on board in the bailout.

“There has been a long debate, we have heard different views,” he said. “Some partners asked that the IMF be involved and we agreed in order to have the agreement. Now we are doing all we can to implement this agreement,” he said.

Schaeuble said the German and other parliaments had agreed to aid Greece on condition that the IMF remained engaged in the program and it would be like “entering a room full of dynamite with a lighted candle” to ask the Bundestag to change that agreement.

Tsipras joked that he didn’t want Schaeuble to blow himself up so they needed to remove the dynamite before he entered that room.

The discussion was also notable for Tsipras arguing that apart from producing balanced budgets, European countries also had to focus on erasing inequalities such as divergent borrowing rates, and Schaeuble responding by saying that solidarity could only come from “respecting agreements.”

“It’s the implementation, stupid,” he added.