The IMF Now Doubts Plan For Greece Will Work

The IMF Now Doubts Plan For Greece Will Work


The IMF Now Doubts Plan For Greece Will Work

From Reuters the latest IMF study, no not that one, a new one

"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 the ESM," the IMF said, referring to the European Stability Mechanism bailout fund.

The IMF study also appeared to challenge the assumption by some European officials that Greece will be able to meet some of its financing needs from the markets in 2018.

"Borrowing at anything but AAA rates in the near term will bring about an unsustainable debt dynamic for the next several decades," it said.

Note current credit ratings


Moodys: Caa3

Fitch: CCC

[Translation of ratings: In default with little prospect for recovery]

So what they are saying is, even if Greece votes for the latest plan, after all the vileness on display in Brussels. they're fucked.

As the Guardian notes

The International Monetary Fund has warned that Greece will require far more generous debt relief than is currently on offer from its creditors, as MPs in Athens prepare for a crucial vote on Wednesday on a new bailout plan. An IMF report leaked to Reuters shows that Greece’s public debt is likely to peak at 200% of its national income within the next two years, with the risk that the actual outcome could be even worse.

and of course

The neo-Nazi Golden Dawn party quickly sought to capitalise on the popular anger that the deal is bound to unleash. “Golden Dawn will resist the new memorandum that the government of the left will sign with the complete support of New Democracy, To Potami and Pasok,” said the organisation’s leader Nikos Michaloliakos, referring to the opposition parties. “An avalanche of taxes is coming. New annihilating measures that will mainly affect the country’s youth, that will increase unemployment and hit farmers who are the soul of the nation, are coming. From every place in this land the battle will continue … so that the plans of foreign rule are not passed.”

So what is being done now is opening up Greece to capitalist vultures via privatization and holding €50 billion in assets ready for liquidation. So basically before things get even worse [a few months] to get any profit in the meantime, asset stripping will have to take place.

As for the latest program that involved some pretty vile statements during its negotiations/passage, well that aint going to work. Some of the neoliberal policies on the table may well help the collapse and even accelerate it.

Then we will be right on back in Brussels in a few months time negotiating how on earth we deal with a total disaster.

How is this worse than negotiating [not just kick them out] an exit from the Eurozone? Oh I know, some assets can be sold off to the lowest bidder, but will they actually have any value whatsoever in a few months time?

The new plan just piles on the misery, offers at best some short term relief before things get a whole lot worse. The other knock on effect is a serious dent in the ideals on which the European Union was founded, solidarity, not so much, we will hang you out to dry. It's not only a warning, but a promise.


Unsustainable debt dynamic = Economic collapse.

Then what?

Free Tagging: