The highly anticipated report on Greece from the Troika (EU/ECB/IMF) has been seen by Der Spiegel, and the outlook is bleak…
Here are the key details… :
- Greece won’t be able to return to the market in 2012, as previously hoped.
- GDP will continue to shrink for the rest of this year and next.
- A new bailout will be needed, but this will violate current IMF rules, which stipulate that there has to be an expectation of an imminent ability to payback the loan.
- Implementation of reforms have come to a “standstill” in recent quarters.
This is the devastating line from the report: “Given the remoteness of Greece returning to funding markets in 2012, the adjustment program is now underfinanced. The next disbursement cannot take place before this underfinancing is resolved“
So far this news has had little impact on markets, probably owing to the fact that this has been realised ages ago.
Still, the fact that implementation of reforms has come to a standstill is troubling.
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