IMF: Give Greece, Spain more time

The IMF yesterday backed giving Greece and Spain more time to reduce their budget deficits, cautioning that cutting too far, too fast would do more harm than good.

But Germany said back-tracking on debt-reduction goals would only hurt confidence, a stance that suggested some disagreement between the International Monetary Fund and Europe’s largest creditor country.

“The IMF has time and again said that high public debt poses a problem,” German finance minister Wolfgang Schaeuble said. “So when there is a certain medium-term goal, it doesn’t build confidence when one starts by going in a different direction.”