Implode-o-Meter News - Greece Braces for More Austerity Amid EU-IMF Quarrel About Debt

Greek Prime Minister Alexis Tsipras braces for yet another vote on additional austerity measures, as European creditors remain at loggerheads with the International Monetary Fund about how much debt relief the country will get for its pain... The Washington-based IMF proposed that interest and principal payments on Greece's European bailout loans be deferred until 2040, and that maturities on those loans will be extended to 2080, according to a document obtained by Bloomberg News. Even though European counter-proposals acknowledge that current Greek debt dynamics are unsustainable, they fall short of what the IMF wants, according to people familiar with the discussions that took place between government officials over the past week. Instead, the euro area expects Greece to maintain a budget surplus level which the IMF has said is a "far-fetched fantasy."
In the quarrel between creditors, Tsipras's government has sided with the euro area, and the measures being put to vote on Sunday assume that Greece will achieve a surplus before interest payments equal to 3.5 percent of gross domestic product by 2018. "Despite the fact the IMF has been pushing for debt relief for Greece, they are still perceived by the Greek public as austerity hawks," Eurasia Group analyst Mujtaba Rahman said in a note to clients on May 19.

After legislating fiscal measures equal to 1.7 percent of Greek GDP last summer, coalition lawmakers are being asked to approve another 3 percent of GDP in tax hikes and pension cuts this month, as well as an additional 2 percent of GDP in contingency measures, which will only be triggered if the country misses certain budget targets. Sunday's package includes among others:

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Greece Braces for More Austerity Amid EU-IMF Quarrel About Debt