3 July 2015, ATHENS (TSR) – The International Monetary Fund has issued a preliminary draft debt sustainability analysis (DSA) of the Greek public debt which vindicates the country’s request for restructure according to the spokesperson of the government.
The report admitted that Greece needs help and said that that Greek debt unsustainable, as it estimated to be 149.9% of the GDP in 2020, far higher than the 124% prediction the Eurogroup made in 2012.
The low primary surpluses, lack of revenue from privatisations, along with the recent deterioration of the economy have had a significant impact on the sustainability of the debt. The IMF estimates that Greece will need 60 billion euros to cover its funding needs for the next three years, meaning that a third bailout may be necessary.
While Greece’s partners refused to debate a debt restructure in the negotiations, the IMF stresses that the “doubling of grace and maturities on existing debt but also a significant haircut of debt” may be required. This is also a condition for the IMF to participate in a new program.
The spokesman for the Greek government Gabriel Sakellaridis commented that the report “fully vindicates the government” regarding the unsustainability of the debt, as well as the need for a debt restructure. Mr. Sakellaridis underlined that the IMF’s report is a “confession of failure” of the memoranda.