BRUSSELS, Jan 29 (APP/AFP) – There’s no need for
alarm over Greece’s debt levels, a spokesman for the EU’s rescue fund body told AFP Saturday, the day after a leaked IMF report described the problem as “explosive”.
“We see no reason for an alarmist assessment of Greece’s debt
situation,” said the spokesman for the Luxembourg-based European Stability Mechanism, or ESM.
“We believe that Greece’s debt burden can be manageable, if the
agreed reforms are fully implemented,” he added.
His words were in contrast to the tone of a confidential
International Monetary Fund (IMF) report obtained by AFP on Friday.
According to that report Greece’s government debt remains highly
unsustainable and will be “explosive” in the long run, requiring a more
credible debt relief plan from Europe.
Even with full implementation of the economic reforms the country has
agreed to, the Greek government will have to replace highly subsidised official financing with market financing at much higher rates, the IMF said.
The pessimistic report, although in keeping with the fund’s repeated
statements on the topic, makes it less likely the IMF will participate in any new European loan deal for Greece.