Top IMF official advises ‘lump sum transfers’ to deflect’ high fuel costs; avoid caps, tax cuts

The IMF’s European department director, Alfred Kammer, on Friday briefed reporters during a press conference following the annual IMF-WB meetings in Washington D.C., where he also fielded a question regarding fuel prices in Greece.

Asked what the Fund proposes in terms of a scheme to lower surging fuel prices in the east Mediterranean country, and given that the government has avoided reducing high fuel taxes, Krammer said:

“…I think our advice to Greece is very similar to the advice we are giving to other European countries. Indeed, taking broad based price measures, caps, tax reduction is not the way to go. Instead, we are advocating targeted, if possible, lump sum transfers to divide honorably in order to deal with the increased cost of living. They should be temporary, and that is particularly important for countries which have limited fiscal space or who need to reduce the debt over time.”