20th June 2014

Economic Policy: IMF considers creating new loan policy

The International Monetary Fund might create new policy for indebted countries to get large loans. New lending rules should drop the exception that enabled Greece to obtain a loan in 2010 without having to first restructure its debt. The proposed changes aim to give flexibility to 2002 rules applying to countries seeking financing above normal limits. Until the 2010 exception, which allowed some nations to receive financing even though the IMF could not say with “high probability” that their debt was sustainable, the fund could either consider that their debt was sustainable with “high probability” and agree to a loan, or in effect force a debt restructuring for the others. New rules should help the member improve its capacity to service its debt without necessarily requiring significant debt reduction, according to the IMF.

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Members of the American Chamber of Commerce in the Czech Republic