EU faces emergency as IMF warns about “explosive” Greek debts

Economy - Mohit Shah - Feb 08,2017

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eu faces emergency as imf warns about explosive greek debts

 

EU faces an approaching crisis as the International Monetary Fund has cautioned about the make-or-break moment between Greece and its foreign creditors.

The IMF has warned Greece’s debts are riding on an “explosive” path in spite of years of attempted strictness and economic reforms.

Global financiers at the IMF are gradually unwilling to supply endless bailouts for the Eurozone’s most disturbed country, pushing more of the burden onto the EU at a serious phase when Germany does not want to retain sending cash to Athens.

Without any fresh payments, Greece will find it hard to recompense its creditors in the summer, reappearing fears that Athens might end up defaulting on its debt and probably rolling out of the euro.

The Eurogroup President Jeroen Dijsselbloem said there would be no Greek debt tolerance and also dismissed the IMF assessment of Greece’s growth predictions as too pessimistic.

Mr. Dijsselbloem commented that “It's surprising because Greece is already doing better than that report describes". He further added that Greece was on track for a significant recovery in the current period.

On Tuesday morning, the Greek 2-year bond yield jumped to near 10 percent; the maximum level since June last year, when similar tensions between the EU and Greece were active.

During the past eight years, Greece has sanctioned a series of stinging cutbacks as well as reforms to correct its economy and continue receiving bailout loans so it can repay its debt.

It was spotted that even if the troubled nation successfully implements all of its planned economic and financial reforms, its debt is anticipated to fall from 179pc of GDP a year ago to 160pc of GDP by 2030.

The International Monetary Fund issued a warning last night saying, Greece cannot be thought of growing out of its debt problem, “even with full implementation of reforms”.

The IMRF further predicted that by 2060 Greek debts will amount to a devastating 275pc of GDP.