By Renee Maltezou and Jan Strupczewski
ATHENS / BRUSSELS (Reuters) – A confidential study by the International Monetary Fund showed that Greece will need a deeper debt relief than its partners in the euro area have been willing to consider, on a day when Germany increased the pressure on Athens to regain the trust of its partners.
The IMF argues that Athens needs help is higher than expected due to the deterioration of its economy and the country’s banks in the past two weeks, according to the study by Reuters had access.
The European countries would have to give Greece a grace period of 30 years for the fulfillment of all its European debt, including new loans and an extension of the very drastic maturities, or make annual tax transfers to the Greek budget, or I accept “profound take away” on their loans to Athens, according to the report.
The IMF analysis leaked as Prime Minister of Greece, Alexis Tsipras, struggled on Tuesday to persuade lawmakers of the ruling party Syriza to support an austerity plan for a new bailout.
The IMF analysis will surely deepen the fierce debate in Germany about whether to give more money to Athens, as it will be taken by many in Greece as a vindication of the request for a remission of debt occurs. A Greek newspaper called it a slap in the face for Berlin.
The German Finance Minister, Wolfgang Schaeuble, made it clear on Tuesday in Brussels that some members of the Teutonic government believe it would make sense that Greece leave the eurozone temporarily and not start a new process of rescue.
Meanwhile, Greek Finance Minister said he sent Parliament the legislation required by the agreement reached with Tsipras euro zone to be voted on Wednesday.
Assuming that legislators Greeks support the severe reforms to comply with the terms and make the country go to a third rescue, the German parliament will have a special session on Friday to discuss whether to authorize the government to start negotiations on a new loan.
“The dramatic deterioration in the debt sustainability points to the need for a relief on a scale that would have to go well beyond what has been considered to date and what has been proposed by the ESM,” he said in its report the IMF, regarding the bailout fund ESM.
A source in the European Union said that finance ministers were aware of IMF figures when they agreed on Monday to map map for a third rescue.
The IMF managing director, Christine Lagarde, the organism was present but did not make public the study, in contrast to previous one released on July 2 in Washington.
VOTE defining
Having avoided a financial collapse with a new agreement, Tsipras is less than 48 hours to quell opposition from hard-line leftists and adopt more severe measures than those rejected in a referendum last week.
Syriza and its coalition ally held meetings to prepare for the debates in Parliament on the laws, which include plans for tax hikes, pension reforms and increased oversight of government finances.
A Greek official ruled out the possibility that Tsipras will resign and the prime minister said probably would carry out a purge of his cabinet after the vote in Parliament.
This is a dramatic turn for Syriza, which came to power in January promising to end years of tax cuts and the recession in a country where a quarter of the workforce is unemployed.
After comparing the challenge facing the government with the Gordian knot that according to mythology was impossible to untie, Interior Minister Nikos Voutsis said anyway Tsipras is confident that will get enough votes in the Parliament.
“They will make decisions that will facilitate the return to normality”, Voutsis told reporters.
The smallest coalition party pledged to support the government, although said they would vote only by the terms of the agreed rescue before the summit last weekend in Brussels, which are less severe.
“We are committed to vote for what we have decided on the advice of leaders politicians, and only that, we will not impose other measures, “he told reporters Panos Kammenos, Independent Greeks party leader, right-leaning.
Kammenos and parliamentary spokesman for Syriza demonstrated against what they described as a “coup” by creditors to force Greece to implement painful reforms, while opponents of the new measures planned protests for the next few days.
Another obstacle could be the president of the Parliament, Zoe Constantopoulou, a key to the logistics of the vote and one of the most fierce criticism from creditors figure.
Tsipras could risk out of its position through a motion of censure, although this strategy would you waste valuable time and political capital to prepare other reform projects.
( Reports Renee Maltezou, Angeliki Koutantou, George Georgiopoulos, Lefteris Karagiannopoulos, Dina Kyriakidou, Costas Pitas, William James, Angelika Gruber and Sumanta Dey. Written by Matthias Williams. Edited by Marion Giraldo in Spanish and Javier Leira)
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