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The Washington Group meeting that took place on Friday revealed that Germany and the IMF are getting closer on the issue of the Greek debt.
The most likely scenario is the extension of the debt by as much as 20 years. The main difference remains on the forward estimates regarding the performance of the Greek economy, where IMF keeps a more conservative stance, whereas the German MinFin expects Greece to have a solid and in budget performance.
IMF head Lagarde stated on Friday that “there is still not much clarity on which measures will help keep the debt on a sustainable track “ and she added that “we will continue working on a set of measures for the debt relief of Greece”.
Regarding primary surpluses, the German stance has softened a bit and from a surplus of 3.5% for 10 years post 2018, it has now fell to 2-2.6% until 2060. In the same context, ECB Executive Board member Benoit Coeure said that they are in a phase of acceleration of the discussion in Greece debt relief talks, with a firm collective intention of reaching a conclusion on May 22.