IMF demands conversion of Greek debt A possible solution would be to cut debt, extending the repayment of bonds or lower interest payments. Owners of government bonds should waive part of their repayments or returns.

The International Monetary Fund (IMF) doubts the success of the aid package for Greece and is pushing for an early conversion of the country's debt. "Conversion of Debt" is a rather gentlemanly expression hiding the simple truth that creditors will have to forego all or parts of loan repayments. These demands were made over the past few days by senior representatives from the International Monetary Fund during talks with officials from European governments - according to DER SPIEGEL, Germany's biggest magazine.

The IMF is about to change course. The IMF now obviously no longer believes itself that the country can be saved with the measures taken so far. IMF representatives argue that a reduction of the debt burden from the current figure of around 150 % of gross domestic product was imperative. A possible solution would be to cut debt, extending the repayment of bonds or lower interest payments. All three alternatives result in owners of Greek government bonds having to forego part of their return. In the opinion of the IMF the Greek government ought to commence talks with its creditors and inform them about the intended conversion of debt. At the moment, however, the IMF is still reluctant to make its considerations public, because it is fearful of this causing more difficulties for the financially stricken Portugal.