IMF confident Europe will stick by promises to Greece

Reuters

WASHINGTON, Oct 10 (Reuters) - International Monetary Fundchief Christine Lagarde said on Thursday that she had 'no doubt'European authorities would stick by their commitments to giveGreece additional debt relief if it meets fiscal targets setunder its bailout program.

The IMF, along with the European Central Bank and theEuropean Commission, gave Greece a cash infusion to help thecountry recover from a crisis and stay in the euro zone currencybloc. But the IMF has said Greece will need additional supportto plug funding gaps next year.

"The European partners are committed to do certain things,and they have always reiterated those commitments, and we hopethey will continue to do that, I have no doubt about it,"Lagarde told a news conference ahead of the IMF and World Bankfall meetings.

Greece on Thursday posted a central government surplus inthe first nine months of the year excluding debt servicingcosts, putting it on track to hit fiscal targets that open theway for debt relief from its internationallenders.

The IMF and European lenders are set to return to Greece bythe end of October to continue a review of Greek reforms andupdate growth and budget forecasts.

Lagarde said one key issue is seeing progress in Greece'stax reforms. The worry is that austerity-hit households mightprove unable to cope with a planned tax onslaught in the comingmonths, though a recovery in the Greek economy could alsoimprove tax collection.

But Lagarde seemed to agree with a plea from Greek PrimeMinister Antonis Samaras, who urged lenders to cut the countrysome slack and not ask Greeks to take any further cuts in jobs,income and benefits.

"If new measures were needed (for Greece), I can tell youone thing is that it is not going to be in the form ofadditional fiscal measures, and it will not in the form ofacross the board, undifferentiated cuts in wages or pensions,"she said.

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