Greece needs to get serious about reforms: IMF

WASHINGTON: Calling Greece’s debt dynamics “unsustainable”, the International Monetary Fund (IMF), one of the country’s main creditors, said it needs to get serious about reforms.

Its existing public debts and the need for more, the Fund said in its “Preliminary Draft Debt Sustainability Analysis” released Thursday, “render the debt dynamics unsustainable”.

To break the cycle, the fund, which for ms the troika of Greece’s creditor with European Commission and the European Central Bank, “Greek policies will need to come back on track but also, at a minimum, the maturities of existing European loans will need to be extended significantly while new European financing to meet financing needs over the coming years will need to be provided on similar concessional terms.”

But, most importantly, the report added, “if the package of reforms under consideration is weakened further—in particular, through a further lowering of primary surplus targets and even weaker structural reforms—haircuts on debt will become necessary”.

Till the time of last such review in 2014, the IMF said, “Greece’s public debt was assessed to be getting back on a path toward sustainability, though it remained highly vulnerable to shocks. By late summer 2014, with interest rates having declined further, it appeared that no further debt relief would have been needed.”