IMF head Lagarde says Fund to mull Greek aid in 2013

(WASHINGTON) - IMF head Christine Lagarde welcomed on Thursday the eurozone's approval of support for a Greek debt buy-back programme, and said that the IMF should now complete a review of its own aid for Greece early next year.

"I welcome the Eurogroups decision to support the debt buy back operation for Greece and its assurances to provide additional debt relief if necessary and provided Greece has achieved a primary budget balance in 2013," said a statement by Lagarde, the managing director of the International Monetary Fund.

Greece was now on track to cut the ratio of its public debt to national output "to 124 percent by 2020 and to substantially below 110 percent by 2022," the statement added.

On this basis, I intend to recommend to the Funds Executive Board that it completes the first review of Greece's Fund-supported program. I expect that a board meeting could take place in January, Lagarde said.

The IMF is a crucial creditor to Greece alongside the European Union, both of which have now agreed to release 43.7 billion euros ($57 billion) in rescue loans in four instalments to help Athens avoid bankruptcy.

Part of that money, an amount of about 34 billion euros, is urgently needed to recapitalise Greek banks which took part in a previous operation to write-down another part of the country's debt in March.

The IMF has been pressing Europe to do more to resolve the Greek debt crisis, after the Fund extended its Greek rescue loan to four years from three years and lowered the interest charged on it.

Despite two bailouts involving the EU, the European Central Bank (ECB) and the IMF as well as the private-sector debt cut, Greece is set to enter its sixth year of recession in 2013, pushing its debt mountain to 190 percent of output in 2014.

Public sector holders of Greek debt include eurozone countries, the ECB and the IMF, which have committed a total of 240 billion euros in rescue loans to Greece since 2010.