Greece will need 'comprehensive debt operation' to make debt sustainable- senior IMF official

According to the official, the report published today does not take into account the recent deterioration of economic conditions in the country - closed banks, imposition of capital controls, non-payment to the IMF – events which could affect the baseline predictions in the immediate future.

However, he continued, the Fund has reached two conclusions: “Greece faces significantly higher financing needs, and given where the country is in terms of indebtedness and its very limited ability to absorb debt, this translates into a need for a much more comprehensive debt operation.”

The official also noted that a detailed discussion on this debt operation has not taken place. However the IMF’s executive board cannot complete this review “unless we have a comprehensive programme, that is sustainable in medium-term context … and that the Europeans agree to a debt operation that helps bring debt on a sustainable path.”

“Before we have both of these things in place, we won’t be able to go to our board and say we have a programme that adds up and that it’s sustainable in a medium-term content,” he noted.