IMF says Greece needs €60 billion in funds

International Monetary Fund says Greece needs 60 billion euros worth of funding and 20-year grace period

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

The International Monetary Fund (IMF) on Thursday has announced that Greece needs  €60B ($69.7B) of funds over the course of three years in order to stabilise the economy, as debaters scratching their heads on the crisis-ridden country’s upcoming referendum. By announcing the crisis-ridden country needs €60B ($69.7B) of funds over the course of three years in order to stabilise the economy.

With no deal reached last weekend with the Greek efforts to secure an extension with the IMF, Prime Minister Alexis Tsipras called his nation to vote in a referendum for bailout terms, offering proposals to reduce the pressure on bank balance sheets.

Speaking to a national TV channel at the start of this week, Tsipras announced  that he will not stay in his post and oversee the cuts if the bailout is accepted in the referendum.

"If the Greek people want to proceed with austerity plans in perpetuity, which will leave us unable to lift our head... we will respect it, but we will not be the ones to carry it out," he said.

Tsipras said “the bigger the turnout and the wider the no-vote to that deal, the bigger the possibility for a substantial restart of negotiations, so that we can take a course of viability and reason.”

Saying that other EU member countries want Greece to stay in eurozone, Tsipras said “I don’t believe that they want to kick us out of the euro and they won’t.”

“They won’t, because the cost would be huge.”

Tsipras also added that Greece’s fight against austerity will be an example to those European societies which have been suffering under austerity policies and trying to find another route to economic recovery.

The IMF made it clear that it would advise a 20-year grace period for Greece to make any debt payments, and the final instalment of payments should be provided in 2015.

Greece would need €10 billion to scrape out of a dangerous near-economic collapse state for the following a few months and a further €50 billion after that, the IMF said.

“So as soon as they get this message, be sure that in a very short time there will be a response."

Some branches reopened on Wednesday to serve pensioners who lined up only to take €120 of their pension, as the limited access to funds restrict the system's capabilities.

Greek citizens will confront a dilemma of an unknown outcome even after the result of the referendum.

Research shows that 47.1 percent seem positive to the creditors’ proposals, whereas the 43.2 percent lean towards voting “no.”

The diverged views continue to polarise Greek society as campaigning for the referendum quickly make their way into the media.

While the “no” campaign sports the title “I vote for No because democracy cannot be blackmailed,” it adds “On Sunday I vote for no because I hope and no longer fear.”

On the other hand, advertisements for the “yes” campaign strongly advised citizens not to trust the government. “Vote Yes for Greece, vote Yes for Euro,” it states.

The Greek stock exchange and banks remain shut down till at least July 6 and ATM withdrawals are limited to 60 euros a day, with an effort to bolster Greek credit controls after international creditors refused to extend the country’s bail out, financial industries reported.

The European Central Bank (ECB) has also ceased funding.

The former ECB board member Lorenzo Bini Smaghi told the Italian daily Corriere della Sera on Sunday that the ECB will no longer be able to back Greek banks, as uncertainty looms the county.

"Given the uncertainty over Greece remaining in the euro the ECB will no longer be able to supply liquidity to the Greek banks, who in turn will be unable to supply euros to their clients," he said, according to the report.

Rating agencies have further slashed down the country’s debt that is now worth over 180 percent of its total GDP.

And they added that, Greece has received two massive bailouts worth over 240 billion euros and the current situations points to another economic contraction. Unemployment has doubled since 2009 and sits at 25.6 percent, with pensions and benefits nearly halved over the course of the last four years.

In Athens on Tuesday, over 20,000 pro-bailout Greek residents came out to protest an hour before expiration the IMF imposed deadline.

However many Greeks back the Tsipras government as a defiant force against what they deem as a ‘troika’ that intervenes into the country's national policy, accusing creditors for the tough recession that has become predominant as a result of punitive austerity measures.

Pro-Greece demonstrations are scheduled to take place this week all around Europe, including in Berlin, Paris, Brussels, Rome and Amsterdam.

TRTWorld and agencies