IMF's Lagarde dismisses accusations on Greek debt as 'nonsense'

Greece and the International Monetary Fund were at loggerheads on Monday over a leaked document that suggested the financial body was trying to push the embattled nation towards default.

In a letter to Greek Prime Minister Alexis Tsipras, IMF chief Christine Lagarde said any accusation that her staff “would consider using a credit event as a negotiating tactic is simply nonsense”.

“The IMF conducts its negotiations in good faith, not by way of threats, and we do not communicate through leaks,” she said.

Greece on Sunday demanded an explanation for the allegations made in the document, released by WikiLeaks, claiming the IMF appeared to be stalling on bailout talks until the country had no funds. A multi-billion dollar EU/IMF rescue package was agreed last year to avoid bankruptcy.

Talks between Greece, the EU and the IMF on a review of that deal, and Greek progress towards implementing fiscal reforms are to resume this week.

According to the document, the conversation on 19 March is between Poul Thomsen, head of the IMF's Europe department, Delia Velculescu, leader of the IMF team in Greece and Iva Petrova of the IMF.

Thomsen is quoted as complaining about the pace of talks on reforms Greece has agreed to carry out in exchange for the bailout.

Lagarde told Tsipras that she felt that “we are still a good distance away from having a coherent program that I can present to our executive board”.

“I have on many occasions stressed that we can only support a program that is credible and based on realistic assumptions, and that delivers on its objective of setting Greece on a path of robust growth while gradually restoring debt sustainability. “

“As you and I have discussed several times, including recently on the telephone, I have been consistent in pointing out that, if it were necessary to lower the fiscal targets to have a realistic chance of them being fully met, there would be an attendant need for more debt relief.”

“In the interest of the Greek people, we need to bring these negotiations to a speedy conclusion."