By Simon Miller

Greece should get cheaper rates if it delivers on fiscal reform commitments according to outgoing head of the Institute of International Finance Charles Dallara.

Speaking in Beijing, Dallara said that the troubled country should get cheaper rates on its €130bn (£105BN) bailout and at least two more years from the European Union and the International Monetary Fund (IMF) to repay them.

However, the chief negotiator for Greece's private creditors added that these better terms could only come after Athens delivered on commitments it made to fiscal reform.

"Once that has been done, and I am confident it will be done, Europe and the IMF should move quickly to extend the adjustment period for at least two years and provide the modest additional financial support for that extension to be effective," Dallara said.

He added: ""Only some €15bn-€20bn is needed. This can easily be realised in part by reducing interest rates on the loans which Europe and the IMF made to Greece on more concessional terms," he continued, adding that responses to the Greek debt crisis placed too much emphasis on short-term austerity and not enough on improving the country's longer-term competitiveness.

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