IMF ‘may withhold Greek aid without more austerity’
Another debt restructuring could be needed in Europe if Greece is unable to implement the austerity needed for it to receive aid payments.
Analysis body Eurointelligence said a recent IMF report warned that more austerity measures of €12bn (£10bn) - totalling 5.5 per cent of economic output - must be found in the next three months to close gaps in Greece’s budget for next year and 2014.
If this does not happen, the IMF has warned it may withhold its first quarterly aid payment in three months’ time.
In such a scenario, Greece would have to rely on either another restructuring or further help from the rest of the continent.
“Without those cuts, the IMF warns, it’s ready to withhold its very first quarterly aid payment in three months’ time,” Eurointelligence said.
“More fundamentally, the [IMF] report argues that in case of any derailment Greece might have to restructure or the eurozone might have to go back to the drawing board again.”