No Greek Debt Restructuring Needed: IMF's Lipsky

The International Monetary Fund (IMF) sees no reason for a restructuring of Greece’s debt at the present time, the organization's First Deputy Managing Director John Lipsky told CNBC.

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Lipsky said the Greek government had the full support of the IMF and the European Union (EU) for the austerity measures and privatization program which Greece will announce after Easter.

The program of spending cuts and privatizations will then be put before the Greek parliament in May.

Lipsky told CNBC the Greek government remained committed to adjusting the county’s fiscal position in order to improve the competitiveness of the economy and to restore the prospect of sustained growth.

“That program is being supported by the EU and the IMF. The Greek authorities have been carrying out and implementing that program and remain committed to it and that programme is supported by the EU and the IMF and does not contemplate debt restructuring," Lipsky said.

He added that the program was ambitious and involved a broad range of policy initiatives. He admitted there had been “many assumptions about the economy, about the external markets, all kinds of things” when the IMF and the EU initially stepped in to rescue the Greek economy from collapse.

“It is typical in a program such as this that there are some corrections as we move forward and that could be the possibility here. But the commitment to the essential program remains intact and for now it remains on track and it does not contemplate debt restructuring," Lipsky added.

Lipsky said the euro zone debt crisis had moved on significantly in the last year. He suggested the threat of contagion was now less great than when Greece sought help, citing in particular the fact that Spain had been able to avoid a bailout by taking “some very courageous and important policy decisions to improve their fiscal position and their competitiveness."

"Financial markets have recognized this improvement, and there has been a decoupling of these markets in a way that was not expected by many market participants many months ago,” he said.

Markets remain unconvinced however with the yield on Greek two-year debt up at 17 percent on Thusday.

Meanwhile, Ireland suffered another blow as Moody's downgraded its credit rating to one place above junk status on Friday morning.

Lipsky also said that a team from the IMF was already in Portugal negotiating the terms of the bailout the country would need and warned the government would have to “carry through a program that will address their competitiveness issues as well as their current issues of debt and leverage.”

The IMF meets this weekend for its Spring conference. Among the things that will be discussed will be the situation in the Middle Eastand how best to provide economic support, the impact of the earthquake and tsunami that devasted Japan last month, Portugal's call for financial aid as well as Greece and Ireland's continuting efforts to win back market confidence.