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The International Monetary Fund (IMF) has fiercely criticised the bailout deal offered to Greece by the eurozone.
It said Greece’s public debt was now “highly unsustainable” and urged debt relief on a scale “well beyond what has been under consideration to date”.
Late on Tuesday, the IMF made public advice it had given to the Eurogroup of finance ministers at the weekend.
That advice included proposals that would see some of Greece’s enormous debt written off.
The IMF study said European Union countries would have to give Greece 30-years to repay all its European debt, including new loans, and a dramatic extension on the maturity of its debts. Without such extensions creditors might have to accept “deep upfront haircuts” on existing loans, the IMF added.
The split between the the IMF and Greece’s European creditors over how best to deal with the country’s debt crisis has been hinted at before, but this is the first time such a disagreement has been made public.
One senior IMF official said the fund would only participate in a third bailout for Greece if EU creditors produce “a clear plan”.
The current deal “is by no means a comprehensive, detailed agreement”, the official said.
The IMF also said it regarded forecast rates of growth for Greece as unrealistically high.
Its analysis, released on Tuesday night, pointed to Greek government debt reaching a peak of close to 200% of GDP or national income – over the next two years, which it called “highly unsustainable”.