The International Monetary Fund is urging the European Union, it must give Greece “upfront and unconditional debt relief” or it will refuse to part-find the latest bailout program. Without immediate action the financial plight of the recession-ravaged country would deteriorate dramatically over the coming decades, the IMF warned in a a strongly worded debt assessment.
The IMF said that there was no prospect of Greece meeting the draconian terms of its current bailout plan and that interest payments on the soaring national debt would eat up 60% of the budget by 2060 in the absence of debt forgiveness.
The debt sustainability analysis by the Washington-based Fund said Greece should have longer to pay, have the interest rate on its loans fixed at 1.5%, and that its creditors should make debt relief automatic once the bailout programme ends in 2018.
German conservative newspaper Die Welt went a stop further and revealed that the IMF want a debt relief amounting 100 billion euros.
Die Welt argument looks like this: The third aid package has a total volume of about 86 billion euros. The IMF would probably participate with a maximum of 1.6 billion euros.
For the European creditors, the bottom line would be a total of just under € 330 billion of public debt, around € 100 billion in debt relief for Athens against € 1.6 billion in IMF aid, should the Fund would not be ready to make concessions.
“Does this sound like a good deal? Would 100 billion euros at 1.6 billion euros be an agreement that [German finance minister ] Scholz could sell at home? And what if not? How far can can he go? What if there was no agreement with the IMF and Greece on the amount of the debt relief?,” Die Welt wonders.
It is a difficult dilemma for Scholz as some members of the German coalition government want to keep the IMF as part of the European rescue program,” the newspapers notes adding that it is first of all Chancellor Angela Merkel who insists on the IMF’s involvement.
good cop bad cop routine, dont ever expect any real debt to be forgiven unless you’re willing to default on it and loudly condemn the whole concept of public debt in the first place.
meanwhile arent we paying taxes on imaginary fantasy income – ‘tekmiria’ – thanks to the imf?