IMF: Greece Rescue Plan Insufficient To Fix Debt Crisis
By Ria Novosti
The International Monetary Fund considers the current restructuring plan insufficient to fix the debt crisis in Greece, Germany’s Der Spiegel magazine said, citing internal IMF documents.
The IMF constantly monitors financial situation in the crisis-hit country makes up for about a third of the 110-billion euro ($140 billion) bailout package for Athens, with the rest being provided by eurozone countries.
The fund is also expected to contribute to a new bailout package of 130 billion euro ($178 billion), agreed in October last year. Along with the direct loans to stabilize budget, the package also envisages financing a debt writedown by private investors and recapitalization of local banks.
However, Der Spiegel said, the current budget austerity program will not work and will have to be modified.
The IMF document proposes three possible solutions for Greece: the introduction of new austerity measures, a writedown of more than 50 percent by private creditors or greater loan support from the European Union.
The document echoes a statement made by an adviser to German Finance Minister Wolfgang Schaeuble, who said on Saturday that the planned 50 percent writedown of Greek government bonds held by private creditors as part of a debt swap won’t be enough to make the country’s debt sustainable.
Greece has a debt of more than 350 billion euros ($448 billion) and faces its fifth straight year of recession.
