UPDATE 1-Financing issues main obstacle on Greek talks-IMF
WASHINGTON, Nov 1 (Reuters) - The International Monetary Fund said on Thursday financing issues remained the main obstacle for debt-laden Greece to receive more bailout money from its international lenders.
Near-bankrupt Greece must push through spending cuts and tax measures worth 13.5 billion euros ($17.5 billion) as well as a raft of economic reforms to satisfy its IMF and European Union lenders and secure a next tranche of aid.
IMF spokesman Gerry Rice said progress had been made and an agreement could come ``soon,'' but discussions continued about the sustainability of Greece's debt.
``The financing for the program has to be consistent with debt sustainability,'' he told reporters at a briefing in Washington.
The ``troika'' of Greece's lenders - the IMF, European Central Bank and European Union - is readying a debt sustainability analysis and pondering ways to plug a financing gap if Greece were to reach a primary surplus.
The options included lengthening the maturities and reducing the interest rate on existing loans, an interest payment holiday, letting Greece buy back its own debt at a discount with borrowed money and allowing it to issue more short-term T-bills.
According to its mandate, the IMF cannot allow lower interest rates on its existing loan to Greece. But Rice said a debt buy-back would be an option, as long as it was actually a ``meaningful reduction'' in Greek debt.
He also said the IMF also supported giving Greece more time to reduce its deficit.
``We've said before we think there's a good case for extending the period of time for Greece to reach its fiscal targets,'' Rice said.
CYPRUS VISIT 'SOON'
Rice also commented on the IMF's program to Cyprus, another European country that requested a bailout after its two largest banks were battered by a Greek sovereign debt writedown. He said the IMF could visit the country soon to further discuss financial aid, but no date had been set yet.
Cyprus's finance minister said earlier on Thursday that he hoped international lenders would visit the country for a final round of talks before a meeting of euro zone finance ministers on Nov. 12.
Hungary, the most indebted economy in the European Union's eastern wing, also asked for help from the IMF and EU last year, but no agreement has yet been reached.
``I do not have a date for the resumption of the mission to Hungary, no mission currently planned,'' Rice said.
``Meaningful progress on program negotiations would require clear indication from the authorities that they see the IMF and EEC (European Economic Community) as valuable partners in designing the reform, and clear commitment from them to policies that ensure fiscal adjustment and promote growth,'' he said.
A deal with the IMF would help Hungary improve risk perceptions and its investment climate.