An IMF report will describe Greece’s debt as extremely unsustainable, as press leaks have previously noted, hours before the report’s contents are presented and discussed to the Fund’s executive directors in Washington D.C.
In fact, the report is expected to propose specific measures aimed at debt relief, given that the IMF must meet its charter obligation to continue lending only to countries that have a sustainable debt.
Conversely, the Fund is expected to take a “fiscally neutral” position in terms of Greece’s state finances, saying no further adjustment is needed in this sector.
The widely reported IMF demand for a lowering of the tax-free annual threshold in Greece in order to expand the tax base will also again be tabled, reports state.
Finally, the report will point to a need to reduce NPEs and NPLs in Greece and to boost corporate governance standards in the country’s banking sector.
Other reports out of Washington, in the form of press leaks, have the authors of the report, led by IMF’s mission chief for Greece Delia Velculescu, pointing out that even with the most optimistic forecast (GDP growth rates above the European average) Greek residents’ living standards will lag behind other Europeans for decades to come.
The most optimist scenario expected to be cited by the IMF holds that living standards in Greece will be able to reach 77 percent of the European median — where they were in 2009 — until 2040.
A more likely prospect, according to the IMF’s technocrats, is that the Greek economy will reach growth rates of only 1 percent per annum, on average. At the same time, they estimate that over the 2022-2040 period, the European average will be 1.3 percent annual GDP growth. Such a model leaves living standards in Greece at 63 percent of the EU average in 2040.
The IMF session, entitled the “2016 Article IV Consultation and Ex-Post Evaluation of Exceptional Access Under the 2012 Extended Arrangement,” is scheduled to begin at 3 p.m. (EST).
