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IMF 'Not Contemplating' Greek Debt Restructuring

The IMF is sticking to a program that "does not contemplate" Greek debt restructuring, acting managing director John Lipsky told CNBC on the sidelines of the G8 conference in Deauville, France.

WASHINGTON, DC - MAY 19: International Monetary Fund First Deputy Managing Director, John Lipsky prepares to speak at the Peterson Institute, on May 19, 2011 in Washington, DC. Lipsky who is acting as Dominique Strauss-Kahn's replacement delivered this years annual lecture on global recovery and global cooperation. (Photo by Mark Wilson/Getty Images)
Mark Wilson
WASHINGTON, DC - MAY 19: International Monetary Fund First Deputy Managing Director, John Lipsky prepares to speak at the Peterson Institute, on May 19, 2011 in Washington, DC. Lipsky who is acting as Dominique Strauss-Kahn's replacement delivered this years annual lecture on global recovery and global cooperation. (Photo by Mark Wilson/Getty Images)

Assistant managing director Lipsky was thrown into the hotseat at the IMF following the arrest of managing director Dominique Strauss-Kahn on sexual assault charges, and his subsequent resignation.

The transition comes at a point when the IMF is still playing a systemic role in managing the debt crisis in the eurozone and cementing a global recovery from the economic downturn.

In Europe, pressure is building behind the restructuring of a 110 billion euro ($157 billon) joint EU-IMF loan to Greece, and on May 20 the fund agreed to contribute 26 billion euros to an extended arrangement for Portugal.

"We're in conversation with the Greek authorities about the outlook and about their policies. Discussions are ongoing," Lipsky said.

We have a programme underway with the Greek authorities, supported by ourselves and our European partners, and that program does not contemplate any restructuring, reprofiling or re-anything," Lipsky said.

He declined to comment on German chancellor Angela Merkel's position on debt restructuring, which some commentators have suggested is not as strongly opposed as the rhetoric suggests.

"Germany, with our other partners, is supporting a program with the Greek authorities, that does not contemplate that restructuring," Lipsky said.

Over the past few years, the Fund has committed $280 billion to countries hit by the economic crisis.

Lipsky said that the IMF remains focused on the task at hand, despite remaining "shocked and concerned" by the arrest of its managing director. He refused to be drawn on a preferred candidate for the new head of the organisation, and on whether he himself was considering making a bid for the top job.

"So far, all the candidates that have been proposed have been highly qualified," he said, emphasising that member countries, not current staff, are responsible for choosing the managing director.

Lipsky's term as assistant managing director ends IMF in August.

Christine Lagarde, the French finance minister, has emerged as the leading candidate despite some opposition from emerging market countries, who argue that the position should reflect the more balanced nature of the world economy. Since the fund's formation in 1944, it has always been headed by a European, while its sister organisation, the World Bank, has always been run by an American.

The decision over the next managing director will be taken by the IMF's executive board, and Strauss-Kahn's replacement is expected to be announced by the end of June.

The IMF is in discussions with the Egyptian authorities for $3-4 billion in IMF aid to support the country's post-revolution economic program, as part of a larger $11-12 billion package.

Contact Europe: Economy

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