BUSINESS

IMF asks eurozone to contemplate a new Greek haircut

By Sotiris Nikas

The International Monetary Fund sent a clear message on Monday in its report on the global economy that Greece?s debt requires a new restructuring in order to become sustainable.

The IMF has revised its estimate for the country?s public debt for 2013 from 160.9 percent of gross domestic product as stated in its April report to 181.8 percent now, and does not expect a primary surplus in Greece before 2014, while the draft budget provides for a primary surplus next year. The Fund adds that the economy will contract by 4 percent next year while Greece?s funding needs will remain over 30 billion euros even in 2014.

The report is in line with the statement by IMF executive board member Menno Snel on Monday. He said that eurozone countries will have to contemplate the restructuring of the Greek debt they hold if the country?s weight is deemed unsustainable. ?A contribution from governments will then certainly be a topic of discussion,? he told Dutch paper Het Financieele Dagblad.

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