The IMF requires that Europe massively reduces Greek debt – L’Express

The IMF best ally of Greece? Often criticized for its tendency to consider only austéritaires measures on the fiscal side, the IMF argues in contrast tirelessly for a drastic restructuring of Greek debt. Exactly what Tsipras claimed the government in exchange for the implementation of reforms demanded and finally imposed by Europe. But in a report released Tuesday, the IMF dates back to the niche by finding that the Greek debt is “completely unsustainable”. But it adds a new means of pressure to his conviction: it will participate in the new rescue plan for Greece Europeans that if the EU is committed to massively reduce the slate of Athens.

“We have been very clear on the fact that (…) we need a concrete and ambitious solution to the problem of debt” to grant new loans to Athens, said a senior part of the International Monetary Fund by submitting a report on Greek debt. This document, published in a hurry after leaks in the press, had been delivered to European leaders Saturday. Two days before the conclusion of a pre-agreement with Greece providing a third plan to help 82 to 86 billion euros over three years in exchange for drastic reforms.

The IMF can not lend money to Greece

According to the IMF, Greece’s debt is expected to approach 200% of GDP in the next two years, against a ratio of about 175% currently. However, the Fund can lend to a country if its debt is considered “viable, with a very high probability.” The Institution of Washington had yet circumvented its own rules to bail out Greece in 2010 and 2012. Today, she seems determined not to repeat the experience.

For the International Monetary Fund, the agreement torn in extremis Monday by Europeans simply states that “additional measures” debt relief could be considered if Athens keeps its commitments. Insufficient for the IMF that “it is not very concrete, it’s a little weak.”

A partial cancellation of Greek debt on the table

The IMF and submit three options to Europeans. The first would extend from 10 to 30 years the “grace period” during which Greece would not have to repay its debt to Europeans. The second, more vague, reside in “annual transfer” of funds that would go directly feed the budget of Greece. The third is without a doubt the most controversial: it would be a “debt forgiveness” pure and simple. But Europeans, Berlin head, do not want to hear about.

German Chancellor Angela Merkel has repeatedly assured that a conventional reduction of Greek debt was “out of question”. In a previous report published before the Greek referendum on 5 July, the Fund had however already mentioned this option, amounting to € 53 billion net loss incurred by the Europeans if Athens does not take its budgetary targets.

Ultimately, this report could revive the debate on the IMF’s commitment to Greece, which is required by Germany but bitterly opposed by Athens. For now, the issue is pending: the IMF is in fact legal incapacity to pay a cent to Greece since the country has failed vis-à-vis the institution on June 30 “We can not initiate discussions on a program until the arrears have not been cleaned”, said the IMF official Tuesday.