Greek NEWS

IMF says debt relief is not enough, Greece has long way to go

Published by
GCT Team

lagardelagarde

As Greece prepares to exit the program era and Tsipras has celebrated his debt deal with creditors, IMF has issued a statement saying although Greece has come a long way, it still faces many challenges.

“Greece has come a long way, but still faces many challenges. Greece will exit the program era having largely eliminated macroeconomic imbalances. Some important reforms have been implemented, growth has returned, unemployment is declining (though still very high), and the recently agreed debt relief package will secure medium-term sustainability. But significant crisis legacies and an unfinished reform agenda still hamper faster growth, while membership in the currency union and high primary surplus targets limit policy options. Boosting growth and living standards will therefore depend on improving the fiscal policy mix, repairing financial sector balance sheets, further liberalizing product and labor markets, and strengthening public sector efficiency and governance,” reads the statement.

IMF took part in the two first bailouts of 240 billion euros ($280.88 billion) that began in 2010 but not a third in 2015 for 86 billion euros ($100.65 billion) provided by the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) that struck a deal to give Greece a longer time to repay and lower interest rates.

The bailouts end on August 20 and Greece will be at the mercy of the markets with two test bond sales of 3 billion euros ($3.51 billion) going at interest rates more than three times the bailouts before the rates were agreed to be reduced, showing it will be costly to get investors.

Greece’s debt currently stands at about 180 percent of its GDP which Tsipras and the lenders agreed was unsustainable but he was unable to move them on granting a so-called “haircut” to write off as much as one-third of what Greece owes, some 108 billion euros ($126. 4 billion).

The IMF said the debt relief deal appeared based on “very ambitious assumptions” about economic growth and the ability to run large primary surpluses, adding it could be difficult for Greece to remain financially independent without further debt relief.

The IMF also stressed the need to protect the independence of the country’s statistical authority and to improve the effectiveness of the judiciary.

Ads1
Ads1

Greek City Times 2025
GCT Team

This article was researched and written by a GCT team member.

Recent Posts

Greece Eyes Israel’s BARAK Air Defense System to Replace Aging S-300s

Greece is considering the Israeli BARAK air defense system to replace its aging S-300s, favoring…

16 minutes ago

Guardian: Trump Announces Sweeping Tariffs of 10-49% on U.S. Trade Partners Worldwide

Donald Trump has announced sweeping tariffs ranging from 10% to 49% on U.S. trade partners…

2 hours ago

Severe Storm “Drowns” Serifos as Greece Braces for Worsening Weather (see vidoe)

A powerful storm struck Serifos on Wednesday, flooding streets and overwhelming residents as part of…

2 hours ago

5th Thursday of Lent: The Great Canon of Saint Andrew of Crete

Saints and Feasts: 5th Thursday of Lent: This most compunctionate Canon- which is truly great…

3 hours ago

Trump Announces Reciprocal Tariffs, Declaring “Economic Independence” for America

President Donald Trump unveiled a new policy to impose reciprocal tariffs on countries worldwide, calling…

3 hours ago

Ancient Garden Unearthed at Jesus’ Burial Site Supports Biblical Account

Archaeologists from Sapienza University have unearthed remnants of a 2,000-year-old garden beneath Jerusalem’s Church of…

3 hours ago