As Greeks attempt to recover from the devastating and deadly wildfires, The IMF has decided to pile on the pain with a new report that raises questions about Greece’s debt sustainability, warning that the nation’s cash buffer is set to drop by half by end of 2022.
IMF Mission Chief for Greece Peter Dohlman told reporters on conference call this morning that Greece’s cash buffer will rise to EU24b as a result of debt relief measures agreed by euro-area finance ministers in June, but that amount is set to drop by half to EU12b by end of 2022.
Translating The IMF’s newspeak, it is explaining that without more generous debt relief measures, Greece “could struggle to maintain market access over the long run”, the fund said in its last economic assessment of the country before the end of its bailout on August 20.
The fund’s calculations find Greece’s debt costs will “begin an uninterrupted rise” after 2038 — costing around 20 per cent of the country’s GDP every year.
It is at this point that “additional relief would be needed to secure debt sustainability”, said the report.
While the world assumed that Greece was ‘fixed’, it apparently is not (surprise!!) and EURUSD is dropping on the news…
And this news hits right as ECB begins to ‘normalize’? Get back to work Mr Draghi…
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