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IMF won't join new Greek bailout until Greece makes reforms, creditors provide debt relief

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WASHINGTON — The International Monetary Fund official cannot participate in another Greek bailout until Greece and its creditors make difficult decisions on economic reforms and debt relief, a fund official said Thursday.

Briefing reporters on condition of anonymity, the official said Greece needs to commit to reforms and creditors must provide debt relief — extending loan terms or reducing the debt outright — that will allow Greece to pay its bills over time. "It's always been clear the IMF will only come in once these conditions are in place," he said, suggesting that point is months away.

Still, the fund is participating in ongoing debt talks.

PHOTO: Greek Finance Minister Euclid Tsakalotos attends a meeting of the ruling radical left Syriza party's central committee in Athens, on Thursday, July 30, 2015. Greek Prime Minister Alexis Tsipras called for an extraordinary party congress in September, after Greece is expected to seal a new bailout deal with its international creditors, in a bid to end a rebellion by his hardline lawmakers that is threatening to topple his coalition government. (AP Photo/Thanassis Stavrakis)
Greek Finance Minister Euclid Tsakalotos attends a meeting of the ruling radical left Syriza party's central committee in Athens, on Thursday, July 30, 2015. Greek Prime Minister Alexis Tsipras called for an extraordinary party congress in September, after Greece is expected to seal a new bailout deal with its international creditors, in a bid to end a rebellion by his hardline lawmakers that is threatening to topple his coalition government. (AP Photo/Thanassis Stavrakis)

In Athens, a government official refused to comment directly on the IMF's participation in the third bailout.

"The IMF's position on debt sustainability is not new. (IMF managing director Christine) Lagarde has referred to this dozens of times," the official said, asking not to be identified because the talks are ongoing.

Bailout negotiations were launched in Greece this week, and have so far largely focused on tax reform, a planned overhaul of labor market regulations, and efforts to simplify bureaucracy for new businesses, as well as attempts to limit an expected recession through 2016.

Lead IMF negotiator Delia Velculescu arrived in Athens late Thursday and was due to meet with Greek Finance Minister Euclid Tsakalotos Friday, the official said.

The IMF has said Greece's debts are likely to rise to 200 percent of its economic output in the next two years, a burden the fund calls unsustainable.

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