Even if the country implements market reforms, VAT increases and pension cuts, its debt will still be too big to service, so why should the IMF contribute to a loan?
The International Monetary Fund is only stating the bleedin’ obvious: Greece’s debts are unsustainable and debt relief is required “on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM”.
The ESM is the European Stability Mechanism, the fund that is meant to be leading the latest €86bn (£62bn) bailout of Greece. So, in essence, the IMF is saying the plan will not achieve one of its primary goals of allowing Greece to fund itself in financial markets within a few years. Even if the country succeeds in implementing the market reforms, VAT increases and pension cuts demanded in Monday’s agreement, the debt will still be too big to service.