Greek prime Minister hopes to make some good use of his visit at Davos for the Annual World Economic Forum by advancing Greece’s case on debt restructuring, among other things. He will meet both with the IMF’s Managing Director Christine and the U.S. Secretary of Treasury Jack Lew.
Greek debt as a percentage to GDP stands currently close to 180% and is, according to most international economists, simply unsustainable.
The IMF’s position is that there is a need for a Greek debt write-off, but Europe refuses to go along with this idea as most of the EU governments taking part in the Greek bailouts have promised their respective citizens that there won’t be any “gifts” made to bankrupt Greece and that all loans will be repaid in full.
Disagreement between Europe and the IMF over Greek debt restructuring appears to be, at least on surface, one of the main reasons for the Fund’s unwillingness to commit itself to the new bailout program. At the same time, however, the Fund follows in Germany’s footsteps in demanding extreme and highly unpopular measures from the Greek government, which no democratic government in Europe would be able to implement.
What Tsipras hopes to accomplish on the debt restructuring issue at this stage is unclear, since both Europe and the IMF demand from Athens tougher pension reform rules and more economic reforms. Yet, Greece’s creditors, and especially the IMF has not specified what exactly additional measures it expects the Greek government to implement, causing much annoyance among Greek government officials, and rightly so.
The tactics pursued by both Germany and the IMF towards Greece can be summed up in two words: sadism unlimited.
Indeed, if the Greek PM Alexis Tsipras really looks after Greece’s real interests, he should use the opportunity of his visit at Davos to let the world know of the cruelty Greece’s masters inflict on his nation and its citizens.