The IMF has published a negative analysis of the debt sustainability of Greece. The Fund calls for transfer payments or a relief of debt.
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IMF chief Lagarde urges Christian debt relief for Greece. | © Eric Vidal / Reuters
The International Monetary Fund has published an analysis according to which the euro zone should extend debt relief for Greece significantly. “Greece’s debt can be sustainable only with measures for debt relief, which go much further than Europe has not provided”, says the report, which was submitted to the governments of the euro countries on Saturday.
Even now, the debt ratio of Greece lie at 175 percent of gross domestic product (GDP), according to the IMF paper. You will approach 200 percent in the next two years. Parts of the report were known as early as Tuesday.
The IMF proposes three alternatives: The extension of time in which to repay any debts to the European partner country, ten of 30 years; secondly, annual transfer payments to Greece; and third, simply a debt. The decision between these options lie “in Greece and its European partners”.
In addition, the economists warn that in case of further deterioration of the Greek economic situation of the financial needs of the country could be even higher in the coming years as accepted.
In particular, they doubt that Greece can generate a primary surplus of 3.5 per cent in household regularly in the coming decades. In the past, only a few countries have managed. Greece have also recently failed to resist the political pressure to reduce the target once in the household, a surplus was achieved. This let “doubts about the assumption arise that such targets over an extended period can be achieved”.
Ambitious is also the assumption that Greece could boost productivity growth and employment rates higher. Greece currently belong at these values among the worst of the euro zone and would have to rise to the top group. To this end, structural reforms are necessary.
The Euro countries had agreed on Monday to a third aid package for Greece. But They made it to extensive conditions, including structural reforms. The possibility of further debt relief for Athens was merely indicated in the agreement, however. Chancellor Angela Merkel (CDU) had repeatedly stated in the past that a classic Haircut , so a haircut, do not come to Greece for her question.
Meanwhile, the Taxpayers Association has asked the members of parliament to refuse a third rescue package for Greece with funds from the euro rescue fund ESM their consent. “MEPs must make sure that the foundations of a functioning monetary union will not be again reduced to absurdity,” explained association president Reiner Holznagel its call in Handelsblatt .
The European leaders – and government threw wooden nail before they would again knowingly bend European law. Even the European Central Bank (ECB) go for a long time to acrobatically with its mandate. “Now also are still the floodgates of the ESM for Greece are opened, although it is doubtful whether this would ever lawful,” criticized the association leader. Finally are ESM aid for Greece “definitely” not indispensable, as prescribing the ESM treaty overlooking the systemic relevance of a country seeking assistance.
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