The International Monetary Fund (IMF) is privately pushing Greece to restructure its debt soon in view of the unsustainable fiscal burdens it is carrying, marking a change of course, German magazine Der Spiegel reported.
Without citing any sources, it wrote on Saturday that high ranking IMF officials were recommending this to European governments due to Greece’s current debt pile that is roughly one-and-a-half times its entire annual economic output.
Early in March, IMF European Director Antonio Borges told reporters he was “confident that Greek debt is sustainable”, adding that the Greeks had made “quite a bit of progress on their banks” as well.
Since the IMF believes current measures no longer suffice, it would like to see either the interest rates on the debt lowered, the maturities extended or straightforward haircuts taken on the debt.
Although it believes Greece should soon begin discussions with creditors over a debt restructuring, it is still not willing to call for the move openly out of fears this could add even further pressure to Portugal and its sagging government balance sheet, Der Spiegel said.
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