IMF calls for Greece debt relief ahead of bailout vote

15 Ιουλ 2015

An International Monetary Fund study published on Tuesday showed that Greece needs far more debt relief than European governments have been willing to contemplate so far, as fractious parties in Athens prepared to vote on a sweeping austerity package demanded by their lenders.


   The IMF's stark warning on Greece's debt came as Prime Minister Alexis Tsipras struggled to persuade deeply unhappy leftist lawmakers to vote for a package of austerity measures and liberal economic reforms to secure a new bailout.
   In an interview with state television, he said that although he did not believe in the deal, there was no alternative but to accept it to avoid economic chaos.
   The IMF study, first reported by Reuters, said European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a dramatic maturity extension. Or else they must make annual transfers to the Greek budget or accept "deep upfront haircuts" on existing loans.
   The Debt Sustainability Analysis is likely to sharpen fierce debate in Germany about whether to lend Greece more money. The debt analysis also raised questions over future IMF involvement in the bailout and will be seen by many in Greece as a vindication of the government's plea for sweeping debt relief. A Greek newspaper called the report, which was initially leaked, a slap in the face for Berlin.
   Late on Tuesday, a senior IMF official, who spoke on condition of anonymity, said, "We have made it clear ... we need a concrete and ambitious solution to the debt problem.
   "I don't think this is a gimmick or kicking the can down the road ... If you were to give them 30 years grace you are allowing them in the meantime to bring down debt by ... getting some growth back."
   German Finance Minister Wolfgang Schaeuble said in Brussels on Tuesday that some members of the Berlin government think it would make more sense for Athens to leave the euro zone temporarily rather than take another bailout.
   The Greek Finance Ministry said it had submitted the legislation required by a deal Tsipras reached with euro zone partners on Monday to parliament for a vote on Wednesday.
   Assuming Athens fulfils its end of the bargain this week by enacting a swathe of painful measures, the German parliament is due to meet in a special session on Friday to debate whether to authorize the government to open new loan negotiations.
   "The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date - and what has been proposed by the ESM," the IMF said, referring to the European Stability Mechanism bailout fund.
   An EU source said euro zone finance ministers and leaders had been aware of the IMF figures when they agreed on Monday on a roadmap to a third bailout.
Πηγή: reuters.com
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