Thursday, July 2, 2015

News Note: IMF "Electrifies the Referendum Debate" just Before the Vote

The Guardian releases this story this morning which could have implications on the upcoming vote in Greece on Sunday. It seems to support the Greek government and says a massive restructuring of the debt and debt relief for Greece has to happen. It also reveals a split between the creditors exists. Below are some key quotes.

"The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs €50bn (£35bn) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.
With three days to go before a knife-edge referendum, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.
Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.
According to the IMF, Greece should have a 20-year grace period before making any debt repayments and that final payments should not take place until 2055.
The IMF’s analysis will be seized upon by Alexis Tsipras, the Greek prime minister, who has been insisting that he will only agree to tough new austerity measures if Greece is granted debt relief.
In a strong message to European leaders, the IMF said they would need to find extra money for Greece following the marked deterioration in the state of the economy since Tsipras’s Syriza coalition took over at the start of the year."

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