The International Monetary Fund has proposed that Greece should not make any loan repayments to the euro zone until 2040, a Wall Street Journal report says.
The Fund proposes that Athens should be excused from paying interest and principal for the next 24 years and for its debt repayments to be spread out between 2040 and roughly 2080, with the current 1.5% interest rate.
The daring proposal is unlikely to be accepted by euro zone member states, and Germany in particular, which is Greece’s biggest lender.
According to the report, the IMF proposal was presented to euro zone governments last week and described by one European official as “hardcore, really.”
The Fund reportedly believes these interventions would keep Greece’s debt repayments to below 15 percent of GDP per year, something that would make the Greek debt sustainable. At present, the Washington-based organization insists that the Greek debt is highly unsustainable and this explains its reluctance to participate financially in the bailout program.
At the moment, Greece’s debt to euro zone countries and European institutions exceeds 200 billion euros.
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