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.