Wednesday, July 15, 2015
"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date—and what has been proposed by Eurozone authorities," the IMF said.
European countries would have to give Greece a 30-year grace period on servicing all its European debt, including new loans, and a very dramatic maturity extension, the report said. Borrowing at anything but the cheapest rates in the near term “will bring about an unsustainable debt dynamic for the next several decades,” the IMF warned, adding: “Other options include explicit annual fiscal transfers to the Greek budget or deep upfront haircuts…The choice between the various options is for Greece and its European partners to decide.”