Greece says finance minister held initial talks with IMF official

ATHENS Wed Feb 4, 2015 Reuters

– Greece’s finance minister met a senior International Monetary Fund official in Paris over the weekend, the new Greek government said on Wednesday, its first meeting with one of the country’s major creditors since taking power last month.

The new government has rejected the “troika” mechanism of European Union and IMF inspectors overseeing the country’s finances. Until now, it had focused its efforts on bilateral talks with its EU partners to replace a bailout programme.

Finance Minister Yanis Varoufakis met with Poul Thomsen, the IMF’s European department chief, who is deeply unpopular in Greece for insisting on austerity policies when he was the top IMF inspector for the country.

“It was a friendly meeting, aimed at the two men getting to know each other given their new responsibilities,” the Greek finance ministry said in a statement.

But the IMF denied that the two sides were discussing a debt renegotiation, as Varoufakis suggested in comments to the Italian newspaper La Repubblica.

“There is an agreed framework for dealing with debt in the current program,” an IMF spokesperson said. “There has been no discussion with the authorities on a change in this framework.”

No negotiations with the IMF had been mentioned until Wednesday, when Varoufakis told La Repubblica that Athens had proposed to the IMF a debt renegotiation along the lines of a deal it is shopping to Europe.

Varoufakis has been hopping across European capitals this week to win support for Greece’s plan to restructure debt and end austerity, which would involve swapping existing government debt for growth-linked or perpetual bonds.

“We are proposing to substitute the other tranches, to the IMF and other countries, with new bonds at market interest, which is very low at the moment, with a clause: we will start the entire repayment once solid growth starts in Greece,” he told La Repubblica.

“I don’t see why they should not accept an extension like they always do in these situations, at least until the end of the year,” Varoufakis said.

The debt renegotiation plan has so far received a sceptical reception from euro zone officials worried that Athens is rolling back reforms and reneging on commitments.

(Reporting by Renee Maltezou in Athens and Isla Binnie in Rome; Writing by Deepa Babington; Editing by Larry King)

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