Breaking With Europe, IMF Calls Greek Debt Program ‘Unsustainable’

The International Monetary Fund — a member of the troika of financial organizations currently demanding austerity from Greece — “electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs” $55 billion in extra funds and large-scale debt relief to create, in its own words, “breathing space” and stabilize its economy, write Guardian economics correspondents Larry Elliott and Phillip Inman.

With three days to go before a knife-edge referendum, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.

Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.

According to the IMF, Greece should have a 20-year grace period before making any debt repayments and that final payments should not take place until 2055.

The IMF’s analysis will be seized upon by Alexis Tsipras, the Greek prime minister, who has been insisting that he will only agree to tough new austerity measures if Greece is granted debt relief.

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— Posted by Alexander Reed Kelly.