The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression.
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date,” said the IMF in a confidential report.
Greek public debt will spiral to 200pc of GDP over the next two years, compared to 177pc in an earlier report on debt sustainability issued just two weeks ago.
The findings are explosive. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.
This vastly complicates the rescue deal agreed by eurozone leaders in marathon talks over the weekend since Germany insists that the bail-out cannot go ahead unless the IMF is involved.
The creditors were aware of the IMF’s report as early as Sunday, yet choose to sweep it under rug. Extracts were leaked to Reuters on Tuesday, forcing the matter into the open.…Looks like a new ballgame.
The backdrop to this sudden shift in position is almost certainly political. It follows an intense push for debt relief over recent days by the US Treasury, the dominant voice on the IMF Board in Washington.The Telegraph
IMF stuns Europe with call for massive Greek debt relief
Ambrose Evans-Pritchard
8 comments:
The US cannot afford to have Germany become the bully boy in Europe. If it does, it is the overt end of US hegemony.
The IMF maintains a blanket disclaimer on its website, which applies as a default to all its documents, indicating that "except where expressly stated, the findings, interpretations, and conclusions expressed in the Materials on this Site represent the views of the authors and thereof are not necessarily those of the IMF, its Executive Board, or its member countries." In general, a specific disclaimer is generally included within each research publication....
Just sayin', Tom ;)
https://books.google.ca/books?id=TL97AgAAQBAJ&pg=PA33&lpg=PA33&dq=imf+disclaimer&source=bl&ots=iSrD8Fcq2Z&sig=EgcGUyyQ9LPXZIcGFVAnsUv1ujo&hl=en&sa=X&ved=0CD4Q6AEwBmoVChMIie_UyNTbxgIVhJceCh3lpAPb#v=onepage&q=imf%20disclaimer&f=false
lastgreek, For you - IMF: We walk away without Greek debt relief
Good God is the IMF calling for a "People's QE?"
http://www.huffingtonpost.co.uk/jeremy-corbyn/invest-in-our-future_b_7755834.html?utm_hp_ref=uk-politics&ir=UK+Politics
lastgrek, I hope you realize that without the IMF being a participant in the Greece deal, the Greece deal is DOA. So this is very relevant to the issue.
As for the mirage of debt-relief within the Eurozone, the wording of the final European Council Statement — signed by Greece — rules it out forever:
“The Euro Summit stresses that nominal haircuts on the debt cannot be undertaken.
“The Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and in a timely manner.”
The above was an excerpt from Alexis Mercouris' piece titled "Angela Merkel's Disastrous Part in the Greek Crisis" and which was posted by Tom in the thread that follows.
Tom, very much a comprehensive article as you say. I'd thank you for posting it here but too depressed to do so after reading it :(
They know that they will be last in line...
If Greece defaults the govts can get theirs the IMF is screwed and they know it...
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