EU Creditors' Position Crumbles: IMF Admits Greece Needs Debt Relief

July 2, 2015

One day after German legislators leaked an IMF report admitting that the "last offer" to Greece would not have made euro debt payable, even if Greece had accepted it, the IMF, itself, has had to publish that report.

Its additional admission—that Greece needs relief on at least 50 billion euros of its debt—is being publicized worldwide and in Greece, and could strongly affect the outcome of the Sunday referendum in Greece on that "last offer." It acknowledges, at least in part, the truth of the Greek government's position, and the incompetence of the European "institutions"—acting for Wall Street and London banks—in refusing to agree to the write-down of any debt.

The IMF report appeared in full on the same day that a major Associated Press story from London was published in the major U.S. press, shaming Germany's leadership for rejecting the Greek proposal of an international debt conference. Germany had half its debt written off by such a conference in 1953, when Greece was one of its creditors, and the "German economic miracle" followed.

Even before the AP story appeared, the London Guardian had reported:

"The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs 50bn (£35bn or $55bn) of extra funds over the next three years and large-scale debt relief to create a breathing space and stabilise the economy.

"With three days to go before a knife-edge referendum, the IMF revealed a deep split with Europe as it warned that Greece's debts were unsustainable.

"Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation's board unless it included both a commitment to economic reform and debt relief [including] a 20-year grace period before making any debt repayments."

Yet the European creditors—and the IMF—had just given Greece a last offer which refused any debt relief, and German Chancellor Merkel had called it "very generous"!

The Greek population now would have to vote to reject such a dishonest and discredited "last offer."

In a third development, Sputnik News reported that a director of China's Institute of Quantitative and Technical Economics opened the potential of China providing credit to Greece. Fan Mingtao said, "I believe there are two ways to give Greece Chinese aid. First, within the framework of the international aid through EU countries. Second, China could aid Greece directly. Especially considering the Silk Road Economic Belt and the Asian Infrastructure Investment Bank, China has this ability."