IMF slams EU over Greek bailout deal that leaves country with “highly unsustainable” debt

15th July 2015

The International Monetary Fund (IMF) has blasted the bailout deal offered to Greece by eurozone creditors warning that it still leaves the country with “highly unsustainable” debts.

It called for debt relief on a scale “well beyond what has been under consideration to date”.

In advice to Eurogroup finance ministers provided ahead of their latest bailout offer, which has just been made public, the International Monetary Fund said that Greece should be given 30 years to repay its debts and that some of the debt should be written off . Without an extension on this scale creditors would have to make “deep upfront haircuts” to the amount owed, it warned.

An IMF official reportedly told the BBC that the Fund would only take part in a third bailout if creditors produce a “a clear plan” and that the current deal “is by no means a comprehensive, detailed agreement”.

Reports suggest that finance ministers were given the IMF report before the latest deal with Greece was reached on Monday morning, so they would have known in advance that they did not have the Fund’s backing.

Under the agreement reached between Greece and the Eurogroup, eurozone governments will provide between €40bn and €50bn to Greece’s new three-year bailout, with the IMF is expected provide further significant support. Greece would also have to sell off state assets to raise money.

The public disagreement between the IMF and the Eurogroup comes as the Greek parliament prepares to vote on many of the economic reforms required by the Eurogroup part of the third bailout deal.

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