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IMF lures Gov’t: “Greece’s Debt not viable, needs Relief, longer repayment, lower interest

What did the International Monetary Fund do first thing in the morning, Washington time, on Thursday? The IMF published a debt sustainability analysis on Greece. Among others, the IMF says that

Greece’s Debt is not viable and

Greece needs a Debt Relief,

€50billion in new finance from October 2015 until 2018

discounted interest and longer repayment period.

Greece’s debt dynamics are “unsustainable,” and the country needs to get serious about reforms, if it hopes to fix the situation, the IMF stresses.

The IMF’s analysis comes just 2.5 days before the crucial referendum on EU/IMF/ECB’s proposals for an agreement between Greece and its lenders and 1.5 day after Greece went “in arrears to IMF” as it missed the payment of four June ‘bundles’, totaling €1.6billion.

“The International Monetary Fund says Greece needs debt relief and 50 billion euros ($56 billion) in new financing from October through 2018.

The IMF said Thursday that Greece’s finances have deteriorated because Athens has been slow about enacting economic reforms. Last year, the IMF predicted Greece’s debt would fall from 175 percent of economic output in 2013 to 128 percent in 2020. Now it sees Greece’s debts at 150 percent in 2020.

The IMF says creditors must offer Greece discounted interest rates and a longer repayment period.”

The International Monetary Fund is putting the blame for Greece’s current economic predicament largely on the Greek government of Prime Minister Alexis Tsipras and the former governments that failed to raise money from privatizations.

“The IMF noted, for example, that Greece has been slow to privatize state assets. In 2011, the IMF predicted that Greece would raise 50 billion euros from selling off state properties by the end of 2015; so far, it has only raised 3.2 billion euros through privatizations.

The multinational lending agency says Greece will need debt relief and 50 billion euros ($56 billion) from October through 2018. It says European creditors will have to come up with 36 billion euros ($40 billion) of that new financing and the credit will have to be offered on “highly concessional terms” — low interest rates and long repayment periods.”

The IMF does not make even the slightest hint on its own mistakes like “false projections” – call them: forecasts –  and wrong multipliers.

It is highly interesting to see how this analysis will be “welcomed” by IMF’s Greek game co-players European Commission and European Central Bank. And especially by Germany, Chancellor Merkel, FinMin Schaeuble and their party friends in CDU/CSU with the hardliners rejecting any further assistance to Greece.

But most interesting it will be to see how the Greek government and the opposition parties will react to this “intervention in Greek internal affairs.”

Now IMF, Tsipras and Varoufakis to be on the same line that Debt Relief, longer repayment period and discount interests.

I cannot tell you whether the government would accept another bailout of 50 billion euro. But the ALL IN ONE Package offered by the IMF is a clear call to vote YES and get the candy. Then the analysis was already “ready” before Greece missed the payment deadline on June 30th and it was “revised” later.

Anyway we have to await for the official government comment.

Negotiations are again ON.

As for the Greek opposition, with the exception of KKE , YES-supporters.. well… it is already beyond reality and control.

I wouldn’t be surprised if Tsipras is the winner also after a YES majority on Sunday – even if he keeps supporting NO.

IMF’s Analysis 24 pages on PDF here

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9 comments

  1. Major boost for a NO/OXI vote I hope. Big riff between the “Institutions”, its always better when the enemy is divided

  2. Merkel admitted in 2010 that the Greek debt was unrepayable so it has never been about the money, it’s been about political control. If the debt is formally forgiven not only do Greece’s creditors lose money but they have to let Greece do its own thing. Otherwise, it’s ‘extend and pretend’ while demanding more structural reforms. Don’t you think that since the IMF have stated categorically that Greece needs debt relief and the Eurogroup (Germany) don’t want to know about it (yet) but don’t want to enter negotiations without the IMF that they’ve reached an impasse and it would be folly to say YES to the proposals at this stage?

    • It is called ASSET STRIPPING the population, business, corporate & the nation.
      Simply raising the pension age is ASSET STRIPPING of the aged.
      As life becomes more expensive, people begin to downsize their lifestyle & eventually the family home – which is the childrens & grandchildrens inheritance is given over to surviving in an expensive economy – A DELIBERASTELY OVERPRICED economy = ASSET STRIPPING.

  3. MARYANN CATHOPOULIS

    Christine LaGarde wants to bleed Greeks to death with more taxes, yet she herself pays NO taxes!

  4. Although I haven’t read the IMF proposals in detail yet, I wonder about the sudden proposal of 30% debt relief. Whose debt are they proposing to relieve Greece of, debt to the IMF or debt to others …

    • keeptalkinggreece

      I understand they talks about the total debt

    • Don’t forget that the IMF report lambasts Greece for not selling off all of its state assets to private (foreign) interests in order to pay the Troika. This may constitute an attempt to force mass privatisation on the Syriza government, meaning that Greek people for the future will have very high costs of all utilities, travel costs, everything…

      I do not think that there will be an agreement after the referendum. This fight will go on and on until Syriza is forced out of government. Then the Troika will put Samaras in power with the sell-off of everything in Greece. The malakas will do it, too: he is nasty little moron.

      • Having lived through the experience of Ireland, where the government didin’t even bother to ask the people, they just said “Yes”, I can tell you that a “yes” vote is absolutely no guarantee for “a better future”, on the contrary. It is a guarantee for ever escalating debt, for a society without a future of its own, for young people without a chance of a future, a society where social justice is non-existent and written out of society by law. A “yes” vote guarantees one thing, and one thing only, permanent serfdom to the elite. Despite Ireland being portrayed as the poster boy of austerity, reality on the ground is one of increasing poverty, increasing division between “have’s” and “have nots”, legally facilitated corruption and tax evasion, and a government being “managed” by the pwoers that be. Greeks would do well to look at that reality and draw the only conclusion possible. Greeks would also do well to realise that modern fascism doesn’t wear a military uniform any longer, it has an anonymous face and wears a 3 piece suit, it symbol is €,$ or anything else representing finance and it is far more dangerous than anything we ever experienced before.

  5. This information had already leaked so perhaps they publish it as a form of damage control. Or it should be seen as reaching out to Greece. Everybody knows and admits -even zee Germans- that austerity doesn’t work and is even counterproductive. And that debt relief is the only thing that can help. So why clinging on to austerity while we all know this. Is Greece to be made a example t others that the financial system does not take prisoners and demands full submission?