Greek debt crisis: IMF says another 52 billion euros in funding required

The International Monetary Fund has warned that Greece will probably need an extra 52 billion euros in bailout loans over the next three years.

   Earlier this week, Greece became the first developed economy to fall in arrears to the IMF when it missed a 1.5 billion euro loan repayment.

   Now an IMF staff report has warned that Greece has fallen so far behind on its previous bailout commitments under a program agreed in 2012 that it will need over 50 billion euros ($73 billion) in concessional financing from international and European agencies between October 2015 and October 2018.

   Using existing arrangements as a guide, around two-thirds of that would need to come from euro area states, who are reluctant to extend Greece further funding without more austerity on the part of the Greeks.

   Even with such concessional loans, the IMF has warned that Greece will remain very vulnerable to economic and financial shocks, with government debt hardly easing, from nearly 180 per cent of GDP now to an estimated 150 per cent in 2020 and 140 per cent in 2022. As a comparison, Australia's government debt to GDP ratio is around 30 per cent.

   The IMF said that for Greece to meet the debt targets outlined in the 2012 bailout agreement it is likely that creditors will need to take a haircut equivalent to a reduction in debt of over 30 per cent of Greece's GDP.

   However, that looks increasingly unlikely, with European Union leaders talking tough ahead of Greece's Sunday referendum on whether Greeks support the savings, tax and reform measures put forward by creditors.

   The head of the Eurogroup has warned that if Greece votes "no" to austerity measures this weekend it risks its place in the eurozone.

Πηγή: abc.net.au