Saturday 22 October 2016

Greek economy will need another €50bn bailout, IMF warns Europe

Renee Maltezou

Published 03/07/2015 | 02:30

For Mr Tsipras, if voters back a bailout plan that he has scorned, his government is likely to fall
For Mr Tsipras, if voters back a bailout plan that he has scorned, his government is likely to fall

The IMF has warned that Greece needs a new €50bn bailout to stay afloat as voters go to the polls on Sunday to decide whether to accept the Troika's terms for help.

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The stark warning came days after Greece defaulted on part of its debt. The latest assessment by the IMF concluded that the EU countries would supply €36bn of the €50bn and that Greece would still require debt relief.

Prime Minister Alexis Tsipras' rejection of what he terms the "blackmail" of EU and IMF creditors demanding spending cuts and tax hikes has so angered Greece's partners that there is no hope of reconciliation before Sunday's vote.

Mr Tsipras and his finance minister, Yanis Varoufakis, remain convinced Athens can negotiate better terms, including debt relief, if voters reject the conditions on offer.

But both have signalled they will quit if voters choose the bailout.

With banks closed for a fourth day and capital controls in place, the future of the left-wing government hangs on the result, given the angry mood of voters in Greece, torn between resentment of the lenders and scorn for their own politicians.

"People have lost it completely. And it's all the fault, 100pc, of all the politicians. They are to blame for the situation we are in now," said pensioner Thanos Stamou.

On Sunday, it will fall to the Greek people to decide an issue that their government was unable to settle in months of acrimonious negotiations with their European partners.

"We are asking them to vote with their eyes open and think hard about all the consequences of a No vote, which could lead Greece to leave the eurozone," French Prime Minister Manuel Valls said.

For Mr Tsipras, if voters back a bailout plan that he has scorned, his government is likely to fall, leading to new elections by September.

Already, his coalition is crumbling as a succession of deputies from the right-wing Independent Greeks, his junior partners, have backed the Yes vote.

The only full survey to be released since the referendum was announced showed the No vote ahead, but falling sharply after the announcement that banks would be shut.

Another poll, compiled for the French bank BNP Paribas and published on the Greek news site euro2day, showed Yes in the lead by 47pc to 43pc, although the head of the pollster GPO, which conducted the survey, told Greek television it was just a partial snapshot from one day, and opinion was very volatile.

Elsewhere in Europe, two-thirds of French people want Europe to stop lending to Greece, a survey by Harris Interactive indicated. Fifty-three percent believed Greece would not pay back any of its debts.

Irish Independent

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