IMF: Greece Needs to Reform for Sustainable Debt

Greece’s debt dynamics are “unsustainable,” and the country needs to get serious about reforms if it hopes to fix the situation, according to an analysis released Thursday by the International Monetary Fund.

The fund—a major institutional creditor to Athens—has long called for Greece to adhere to a strict reform program, but the left-wing government has resisted, and ended up missing its June 30 debt repayment of about 1.55 billion euros to the IMF. The institution warned that the country may require a debt writedown without sufficient reform and strong growth.

The situation is so bad for Greece, the analysis said, that the government needs about 51.9 billion euro between October 2015 and December 2018. And the economic position has worsen: Last year, the IMF predicted Greece’s debt would fall from 175 percent of economic output in 2013 to 128 percent in 2020. Now it sees Greece’s debts at 150 percent in 2020.