The International Monetary Fund expects Greece to show a fiscal gap between 32 and 67 billion euros after the end of the new funding program, in 2014, according to a report seen by Dow Jones Newswires, and proposes an alternative plan with a slower pace in reforms.
The IMF therefore expresses its worry that Athens may well require a third bailout package in a few years’ time as the first two simply would not suffice.
“Prospects for a return to the markets are becoming ever less certain,” the Fund’s report says.
European officials have estimated that after the completion of the new program for Greece, Athens would be able to return to the markets, at least with short-term bonds of high risk as the country’s record in the market will initially run counter to the issue of long-term bonds. That may actually entail a dependence on official creditors.
Given the particularly high exposure of the IMF in Europe, and particularly in Greece, the Fund assumes that any further assistance would need to come from eurozone coffers only.
However, the IMF considers the threat to the full and timely implementation of the reform program to be particularly high. It therefore offers an alternative plan according to which fiscal reforms would be put off by up to three years and reforms would be conducted at a slower pace than planned owing to market limitations and political obstacles.
According to this scenario, the debt-to-gross domestic product ratio would reach up to 171 percent in 2014 instead of 160 percent, and to 146 percent in 2020 instead of the 117 percent planned by the agreement between Athens and its creditors.