IMF losing confidence in Greece’s ability to reform

BERLIN: The International Monetary Fund (IMF) is losing confidence in Greece’s ability to clean up its public finances and work off its mountain of debt, German magazine Der Spiegel reported.

Citing an internal IMF memo, the news weekly said the body considered Greece’s current re-adjustment programme insufficient and that new measures would have to be taken if the country was to avoid default and meet targets agreed with creditors.

The magazine said the IMF saw three options: either Athens enacted further austerity measures, private creditors wrote off more of their investments in the country’s sovereign debt, or states in the eurozone increase bailout aid.

Earlier on Saturday, an adviser to Germany’s finance minister Wolfgang Schaeuble told a Greek newspaper that a 50% writedown on Greek debt holdings, part of Greece’s debt swap deal, was not enough to put the country on a viable path.

Banks and investment funds have been negotiating with Athens for weeks on the scheme, which aims to cut Greece’s debt-toGDP ratio from 160% to a more manageable 120% by 2020 – a key part of the country’s second, 130 billion euro bailout.

Der Spiegel, in its edition that hits news stands on Sunday, said this 120% target was now in question.

It said the IMF had strong criticism for Athens’ sluggish structural adjustment, especially regarding tax collection and state asset sales.