IMF to propose 28 bn euro loan for Greece

WASHINGTON (AFP) - The International Monetary Fund plans to offer a new loan for Greece worth 28 billion euros ($36.7 billion) as part of the country's second bailout package, IMF chief Christine Lagarde said Friday.

"Today I have consulted with the IMF's Executive Board and on that basis, as discussed with the Greek government, I intend to recommend a 28 billion euro arrangement under the Fund's Extended Fund Facility (EFF) to support Greece's ambitious economic program over the next four years," she said in a statement.

The figure, much higher than expected, came after Greece garnered strong support from private creditors for a massive 107 billion euro writedown of its debt -- a key part of the 237 billion euro bailout package designed by the European Union last month.

"I welcome the cooperation of the private sector in participating in the debt exchange offer by the Greek authorities," Lagarde said.

"This is an important step that will dramatically reduce Greece's medium-term financing needs and contribute to debt sustainability.

"The IMF's continued support would be part of an integrated package where all parties -- the Greek government, its European partners, the private sector, and the Fund -- would play their part to help the Greek people overcome this crisis and over time restore growth, thus contributing to broader global financial stability."

She said the Greek loan will be proposed to the IMF board next week.