AFP, Washington :
The International Monetary Fund on Tuesday urged Greece to be “realistic” about its economic goals, and reiterated the longstanding concern the country may yet need additional debt relief.
The IMF board welcomed the agreement Athens reached with the European Union in June to reduce the country’s debt burden over the next five to 10 years but said it may be insufficient given the potential for political opposition to further reforms.
“For longer-term, we have doubts they can achieve and while growing at the rate expected and needed to bring down the debt,” Peter Dohlman, the IMF mission chief for Greece, told reporters.
Eurozone ministers agreed to extend maturities by 10 years on major parts of Greece’s total debt, a mountain that is more than double the country’s annual economic output.
In turn, Greece committed to a primary budget surplus – not counting debt repayments – of 3.5 percent of GDP through 2022, and 2.2 percent through 2060, with average economic growth of three percent a year.
However, the IMF’s annual report on the Greek economy and debt sustainability once again questioned those “very ambitious assumptions,” and said they would be hard to maintain for many years and would require onerous
new spending cuts, including to pensions.
The Greek people have faced years of economic hardship, tax increases and high unemployment, and there already are signs of “reform fatigue,” the IMF said.
“Greece’s impressive fiscal adjustment to date has been achieved via a
growth-unfriendly policy mix,” the report said, warning that “political
pressures to roll back reforms may intensify ahead of the 2019 elections.”
Dohlman said while the country could meet the targets through 2022, “as
debt matures and is replaced by more expensive debt, ability to service its
debt becomes more challenging.”
The International Monetary Fund on Tuesday urged Greece to be “realistic” about its economic goals, and reiterated the longstanding concern the country may yet need additional debt relief.
The IMF board welcomed the agreement Athens reached with the European Union in June to reduce the country’s debt burden over the next five to 10 years but said it may be insufficient given the potential for political opposition to further reforms.
“For longer-term, we have doubts they can achieve and while growing at the rate expected and needed to bring down the debt,” Peter Dohlman, the IMF mission chief for Greece, told reporters.
Eurozone ministers agreed to extend maturities by 10 years on major parts of Greece’s total debt, a mountain that is more than double the country’s annual economic output.
In turn, Greece committed to a primary budget surplus – not counting debt repayments – of 3.5 percent of GDP through 2022, and 2.2 percent through 2060, with average economic growth of three percent a year.
However, the IMF’s annual report on the Greek economy and debt sustainability once again questioned those “very ambitious assumptions,” and said they would be hard to maintain for many years and would require onerous
new spending cuts, including to pensions.
The Greek people have faced years of economic hardship, tax increases and high unemployment, and there already are signs of “reform fatigue,” the IMF said.
“Greece’s impressive fiscal adjustment to date has been achieved via a
growth-unfriendly policy mix,” the report said, warning that “political
pressures to roll back reforms may intensify ahead of the 2019 elections.”
Dohlman said while the country could meet the targets through 2022, “as
debt matures and is replaced by more expensive debt, ability to service its
debt becomes more challenging.”
