Amwal Al Ghad English - 2016-05-17 10:32:20
The International Monetary Fund (IMF) is pressing the eurozone to let Greece skip paying interest or principal on bailout loans until 2040, said officials familiar with the talks.
The IMF wants the loans to Greece to fall due gradually in the following decades, and as late as 2080, according to the IMF's proposal.
Greece's interest rate on eurozone loans would be fixed for 30 to 40 years at its current average level of 1.5%, with all interest payments postponed until loans start falling due, under the IMF proposal.
The IMF's proposal, presented to eurozone governments late last week, would keep Greece's annual debt-service needs below 15% of its gross domestic product, under the IMF's relatively pessimistic forecast for Greece's long-term economic trajectory.
The IMF's demands go far beyond what Greece's eurozone creditors have said they are willing to do to help Greece regain its financial health.
Eurozone governments, led by Germany, are reluctant to make such major concessions on their loans to Greece, which currently total just over EUR200 billion ($226 billion) with around another EUR60 billion to come under the latest Greek bailout plan.
But Germany, the eurozone's dominant economic power, also wants the IMF to rejoin the Greek bailout as a lender. The IMF hasn't yet signed up to the Greek program agreed last summer.
German Chancellor Angela Merkel has long viewed the IMF as essential to the credibility of the Greek bailout. Her government promised Germany's parliament, the Bundestag, last year that the IMF would join the new bailout program before Europe disburses further money to Athens. More»