Handelsblatt Exclusive

E.U. Commission Vice President: IMF Too Pessimistic on Greece

European Commission Vice President Valdis Dombrovskis, in an interview with Handelsblatt, criticized the International Monetary Fund’s projections for Greece as overly pessimistic and called on creditors to release fresh funds to Athens.

Mr. Dombrovskis said Greece’s reform program was going according to plan. Athens had done “almost everything” in the E.U. executive’s view to complete the second review of its third bailout program.

The European Union expects economic growth of 2.7 percent in Greece this year and a primary budget surplus of 1.75 percent. By 2018, the budget surplus could rise to 3.5 percent, he said.

Poul Thomsen, director of the the IMF’s European department, rejected the charges in a statement to Handelsblatt: “The accusation that we have outdated models and have persistently been too pessimistic is at odds with the fact that the Greek program has been missing targets for many years. If anything, we have time and again been too optimistic about growth and fiscal surpluses, mainly because reforms have not been implemented as expected,” he said.

The IMF has refused to participate in another rescue program for Greece unless European leaders relax their demands on the primary surplus and consider debt relief, though a deal in principle was reached between euro zone finance ministers and the Washington-based lender at the end of last week. Mr. Dombrovskis said the European Union and the IMF were working to resolve their differences, but added it was still open whether a full deal would be reached by the next meeting of the Euro Group of finance ministers on February 20.

While Mr. Dombrovskis believes Greece is on the right path, he said France needs to do more to bring its budget deficit under 3 percent of its gross domestic product. Italy also has to do more and should cut its budget deficit by another 0.2 percentage points this year to 2.2 percent, down from the country’s proposed plan for a 2.4-percent deficit, he said.

Read the full interview in Wednesday’s Handelsblatt Global.

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