IMF says still need credible debt relief for Greece

Despite an agreement reached Tuesday on a reform package, Europe still needs to provide "credible" debt relief to Greece before the International Monetary Fund can provide more financing, an IMF official said.

Greece and its creditors closed a troubled chapter in the negotiations with a preliminary deal on pension and tax cuts after many months of talks.

"Now, this will have to go hand in hand with a credible strategy for how to restore debt sustainability," said Poul Thomsen, head of the IMF's European Department.

Those discussions on how to address the Greek debt burden are only now getting underway, he told reporters in a conference call.

"Once we have (a) program that consists of both legs -- strong policies and strong debt relief measures -- we can take it to the board" of the IMF for approval.

But that could be the thorniest part of the negotiations with Europe, which has been reluctant to provide more debt relief, particularly Germany, where additional concessions are unpopular and a general election is looming in September.

Greece Finance Minister Euclid Tsakalotos said he hoped to see a final deal in time for the May 22 meeting of eurozone finance ministers, which must approve the agreement.

A compromise is required to unblock a tranche of loans Greece needs to repay seven billion euros ($7.6 billion) in maturing loans in July.