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IMF ADMITS: Austerity Measures Would Still Leave Greece With UNSUSTAINABLE DEBT
Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika
by SGT, SGT Report.com:
I had the pleasure of speaking with my good friend Harley Schlanger on Tuesday, the day of the great Greek default. As usual Harley had many thought provoking insights about the developments in Greece, at the fore is Harley’s belief that “This is what the Bankster’s fear the most“, a government and populace turning its collective back on austerity and Bankster tyranny.
I will post the full interview with Harley Schlanger later this evening, but just wanted to share this note I recieved from him this morning. Harley writes,
“Sean, Troika documents show the IMF/banker’s plans for Greece will NOT Succeed. Here’s the latest evidence, from the Troika’s own documents, that they knew their policies could not work, even if the Greeks adopted them. Don’t buy into the psy-war about Tsipras capitulating. The Financial Times ran a story today saying he gave in, then admitted, an hour later, that the letter they cited to claim he capitulated said no such thing!”
Here’s the scoop from The Guardian:
Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.
The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.
The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.
The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.
Even under the best case scenario, which includes growth of 4% a year for the next five years, Greece’s debt levels will drop to only 124%, by 2022. The best case also anticipates €15bn (£10bn) in proceeds from privatisations, five times the estimate in the most likely scenario.
