The Financial Times is reporting that a confidential IMF report is saying that Greece’s public debt is ‘unsustainable’ and is set to spiral to three times the size of Greece’s annual economic output, and that Greece’s economy cannot be expected to grow out of its debt problem.
Anyone genuinely familiar with the situation in Greece, and who is able to look objectively at the situation there, can see that this is so. I recently wrote for The Duran my impressions of the state of the country after a short visit there in November. I made the point that despite claims that the economy was growing, all the indications on the contrary were that the situation is actually deteriorating.
Here is how the Financial Times summarises the IMF report
Greece faces what is likely to be an “explosive” surge in its public debt levels that within decades will mean it will owe almost three times the country’s annual economic output unless given significant debt relief, the International Monetary Fund has warned in a confidential report. The new report was prepared by IMF staff ahead of a February 6 board meeting to discuss the fund’s participation in an EU-led €86bn bailout of Greece and signals the continuing hard line the IMF is taking on debt relief for Athens. It offers a bleaker view of Greece’s economic dilemmas than an analysis prepared last year, warning that the debt load is “highly unsustainable” and would not improve even if it implemented further reforms recommended by the fund.
That assessment would, under the fund’s own rules, prohibit the IMF from taking part financially in the current bailout, something countries such as Germany have made a condition of their own support. “Even with these ambitious polices in place, Greece cannot grow out of its debt problem,” IMF staff warned in the report, seen by the Financial Times and drafted as part of the fund’s annual review of member economies. “Greece requires substantial debt relief from its European partners to restore debt sustainability.”