IMF: Greece Will Need A Third Bailout

Athens riot

Photo: Alexander Aston

In an interview with the WSJ’s Costas Paris, IMF alternate executive director Thanos Catsambas said that Greece will need a third bailout.Catsambas called the possibility of Greece meeting funding requirements in coming years by itself “totally unrealistic.”

More from the WSJ report:

Troika representatives are currently in Athens to assess Greece’s situation and the possible disbursement of a €31 billion ($39.99 billion) loan, part of a second bailout package that totaled €173 billion. The payment is imperative for the Greek government to avoid running out of cash, but officials now suggest they don’t expect a final decision on how to proceed with Greece until November.

The coalition government of Prime Minister Antonis Samaras is facing growing public anger as it is tries to revive delayed structural reforms and implement fresh cutbacks of around €11.5 billion over the next two years.

The creditors are unanimous that this is Athens’ last chance if the financing is to continue. Without the loan payment, the government would run out of cash in a matter of weeks and would have to find new ways of meeting its current obligations, such as pensions and public-sector wages. In an extreme scenario, this may require leaving the euro zone and printing a new currency.

Mr. Catsambas called this last option “an undesirable eventuality that will set the country back many decades.”

Read the full report at the WSJ >

UPDATE: Greek Finance Minister Yannis Stournaras denied that Greece will need a third bailout in an interview with Reuters.

MORE: Greece’s Two Biggest Unions Are Planning Protests Against Austerity >

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