IMF signals it could walk away from new Greek bailout programme
One thing that has stood out in all the insider talks from the Greek bailout discussions (most of them from Varoufakis) was a slow realization from the IMF that German-austerity wasn't the solution and that Greece's debt load was unsustainable.
They tried quiet diplomacy but were pushed out. Now, the IMF may be launching a fresh salvo.
"In the three-page memo, sent to EU authorities at the weekend and obtained by the Financial Times, the IMF said the recent turmoil in the Greek economy would lead debt to peak at close to 200 per cent of economic output over the next two years. At the start of the eurozone crisis, Athens' debt stood at 127 per cent.
The memo argues that only through large-scale debt relief - something eurozone officials have fiercely resisted - could Greece see its debt fall to levels where it would be able to return to the financial markets."
IMF rules say it can't participate in a bailout if it determines that a country's debt is unsustainable. They bent those rules in the first two Greek bailouts and that proved to be unwise because they left themselves open to criticism that it was a euro-bailout, not aid for Greece.
Germany pushed Greece to request an IMF bailout extension (and eventually won out) but Berlin may not have considered the IMF denying the request.
