IMF: Greek debt is unsustainable
- Written by E.Tsiliopoulos
Greece will need substantial debt relief and 50 billion euros in new financing until 2018 in order for its debt to be sustainable, according to an International Monetary Fund (IMF) analysis released on Thursday.
"Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets," the fund's report said.
It also said that the new financial assistance programme proposed by the institutions to Greek authorities will require 36 billion euros in "new European money" over the three-year period.
The IMF report revised its earler forecasts for Greek debt, predicting that this will stand at 150 pct of GDP in 2020 and closer to 140 pct of GDP in 2022.
Noting the "fragile" dynamic of the country's public debt, it said further concessions will be necessary to restore debt sustainability and called for broader consensus among the country's creditors.
The IMF says creditors must offer Greece discounted interest rates and a longer repayment period. It proposed extending a period of grace for the memorandum loans to 20 years and the gradual repayment of loans given by the EU over 40 years.
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