ATHENS – Just as Greece agreed a bailout deal with European creditors that will see more pension cuts and taxes on low-income families, the International Monetary Fund said the country can’t repay 326 billion euros ($373.27 billion) in three international bailouts.
That sobering news came as the ruling Radical Left SYRIZA-led coalition is mulling a test return to the markets, a move that Bank of Greece Governor Yannis Stournaras said would be premature and bring additional costs as well as the billions being paid out in interest on the rescue packages, that include the IMF’s participation in the first two bailouts.
The IMF earlier had said the debt was unsustainable but was willing to take part in the third bailout – after saying it wouldn’t – under certain conditions even while repeating that Greece won’t be able to repay the loans in full.
The IMF’s board will discuss whether to join in during a meeting on July 20, the newspaper Kathimerini said, including what kind of short-term measures could be taken and that the Washington, D.C.-based agency will stay out unless the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) provides debt relief and takes the hit while the IMF would stay protected.
The IMF earlier said Greece’s debt would become unpayable after 2030 when the interest passes 20 percent of the Gross Domestic Product (GDP), and added that banks might need another 10 billion euros ($11.45 billion) in funding.
An IMF source said that the chances of the fund disbursing the 1.6 billion euros ($1.83 billion) Greece has requested “are limited” right now.