Greek prime minister Alexis Tsipras has been speaking. He said the latest IMF report confirms his government’s argument that its debt position is not sustainable. The report said the cash-strapped country needs up to €60bn (£42bn) of extra funds over the next three years and large-scale debt relief to give Greece some breathing space and get its economy back on track. (Guardian live on Eurocrisis 2015-07-03 14:18 GMT)
cf. IMF Country Report No. 15/165, June 26, 2015 Greece: Preliminary Draft Debt Sustainability Analysis full: http://www.imf.org/external/pubs/ft/scr/2015/cr15165.pdf IMF's Summary: http://www.imf.org/external/pubs/cat/longres.aspx?sk=43044.0 At the last review in May 2014, Greece’s public debt was assessed to be getting back on a path toward sustainability, though it remained highly vulnerable to shocks. By late summer 2014, with interest rates having declined further, it appeared that no further debt relief would have been needed under the November 2012 framework, if the program were to have been implemented as agreed. But significant changes in policies since then — not least, lower primary surpluses and a weak reform effort that will weigh on growth and privatization — are leading to substantial new financing needs. Coming on top of the very high existing debt, these new financing needs render the debt dynamics unsustainable. This conclusion holds whether one examines the stock of debt under the November 2012 framework or switches the focus to debt servicing or gross financing needs. To ensure that debt is sustainable with high probability, Greek policies will need to come back on track but also, at a minimum, the maturities of existing European loans will need to be extended significantly while new European financing to meet financing needs over the coming years will need to be provided on similar concessional terms. But if the package of reforms under consideration is weakened further — in particular, through a further lowering of primary surplus targets and even weaker structural reforms — haircuts on debt will become necessary. +++ cf. also: IMF says Greece needs extra €60bn in funds and debt relief http://www.theguardian.com/business/2015/jul/02/imf-greece-needs-extra-50bn-euros [...] The IMF said that is was releasing its preliminary draft debt sustainability analysis as a result of the leaks of documents reported in the Guardian earlier this week. Significantly, it said its assessment had “not been agreed with the other parties in the policy discussions” – an admission that the fund is at odds with its troika partners, the European commission and the European Central Bank – over the need for debt relief. The fund has traditionally viewed debt relief as an integral part of any package to improve the economic prospects of a country seeking help, but it has met resistance from European governments fearful that the cost would have to be met by their own taxpayers. In response to criticism that the IMF has failed to tackle intransigence in European capitals against a further debt write-off, a senior IMF official said: “We are asking the Greeks to do very difficult things. We are also asking the Europeans to do something very difficult. “The extension of maturities [by the EU] on Greek debt would be a dramatic move.” He said that while “it was a fact that Europe has already provided considerable debt relief in GDP terms” to Greece, the current dire situation meant they needed to do more. The official said he had refused to put forward plans for a further bailout of Greece to the IMF board without a comprehensive deal that included debt relief. “We cannot go to our board with this report unless we have a credible programme that is sustainable and with a policy from the EU on debt relief. We want a comprehensive solution and cannot go to the IMF board without it.” _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
