The International Monetary Fund’s (IMF) analysis, presented by Bloomberg, states that Greek debt will soar to 293.8 percent of its GDP by 2060 if there is no debt relief. Statements point to an agreement possible at the Eurogroup meeting of Eurozone finance ministers on May 24, but for this to occur Greece is voting for yet another harsh bill of austerity.
The same report recommends a 17-year grace period for EFSF loans, a 6-year period for loans from the European Stability Mechanism and a 20-year grace period for transnational loans that Greece had received in the first bailout agreement. The interest rates for EFSF/ESM loans should be fixed at 1.5 percent (upper level) at least until 2045. Furthermore, the IMF requests for the extension of European loans until 2080.
Unless these measures are taken, Greek public debt will propel to 293.6 percent of the GDP. The IMF suggests that a new recapitalization is necessary bearing in mind the huge proportion of non-performing loans in Greece. The IMF views Greek debt repayment as unsustainable and is urging creditors to show clarity.
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