Instead of front-loading the Greek bailout with budget cuts and structural changes, Ms Lagarde said "it is sometimes better, given the circumstances...to have a bit more time".
"This is what we advocated for Portugal, it's what we advocated for Spain, and it's what we're advocating for Greece, where I have said repeatedly that an additional two years was necessary for the country to actually face the fiscal consolidation programme that is considered", Ms Lagarde said.
Germany is leading a drive by eurozone fiscal hawks to extract the maximum in economic changes from the Greek government. But the IMF fears that Greece's political and social tensions are near breaking point and any more budget pressures may spoil its chances for restoring growth.
Extending the targets would broaden the gap in financing that Greece needs filled to avoid defaulting on its debt. Some officials close to the matter say a two-year extension could add up to €20 billion to the new financing bill.
Ms Lagarde has also recently broached the delicate subject of Greek debt held by eurozone governments, saying that also must be "addressed". Some fund-watchers took her comments as the IMF's public, albeit oblique, acknowledgment that a restructuring of that debt may be necessary to put Greece's programme back on track. Coming amid the IMF and World Bank meetings, where finance ministers and central bankers convene, Ms Lagarde's remarks will likely add to the peer pressure on Germany to be more flexible in dealing with Athens. Greece's crisis threatens to inflame eurozone woes that have been muted by recent European Central Bank actions.
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