The Greek debt has become highly unsustainable and Greece won’t be able to deal with it only with reforms, the head of the International Monetary Fund’s European department, Poul Thomsen told in Lima, on the sidelines of a meeting of the IMF calling Europe to proceed to Greek debt relief actions.
Mr. Thomsen warned that the Greek debt has been unsustainable noting that it was set to be more than 200% of GDP.
Therefore, as he pointed out, it is almost certain that Athens will not succeed only with reforms.
According to Poul Thomsen, this means that Greece will need a debt relief greater that the one European Union examines so far.
“We think that Greek debt, which was set to be more than 200% of GDP, has become highly unsustainable,” Poul Thomsen, said. “We think that Greece cannot deal with the debt without debt relief.”
He also said that if Europe decides to provide relief by further extending the grace period on repaying its loans as well as lowering interest rates further then these measures would have to be significantly adjusted.
“There is no doubt in our mind … that if Europe wants to go the route of providing debt relief by lengthening the grace period and lengthening the repayment period significant lengthening of the grace period and significant lengthening of the repayment period compared to where we are now.” he said.