Trading Room home page

Greek debt not viable without more EU help

Market watch top headlines

Australian reports

World reports

Stocks to watch

ALQ, AGO, BCI, FMG, RIO, BHP, HRR, NAB, PDN, PRY,

ATHENS, Jan 18 AFP

January 19 2013, 02:50AM

Greece will need additional help from its European partners to bring its huge debt under control in 2016, a senior IMF official says.

"There is a gap according to our preliminary projections for 2015/2016" of up to 9.5 billion euros ($A12.15 billion)," Poul Thomsen, the IMF's mission chief for Greece, told a conference call on Friday.

"The IMF's policy is that the program needs to be fully financed for the 12 months ahead...What is key is that the Europeans know there is a gap and they'll have to fill it," he said.

The IMF has been pressing Europe to do more to resolve the Greek debt crisis, after the Fund extended its Greek rescue loan to four years from three years and lowered the interest charged on it.

Despite two bailouts involving the EU, the European Central Bank (ECB) and the IMF as well as a private-sector debt cut, Greece is set to enter its sixth year of recession in 2013, pushing its debt mountain to 190 per cent of output in 2014.

The global lender on Wednesday unblocked a frozen slice of 3.2 billion euros ($A4.09 billion) from its outstanding aid package.

But Thomsen insisted on Friday: "We only went ahead because we got assurances from the Europeans that they would provide the money" for Greece's future needs, before the country can return to the markets for financing.

He said the IMF did not think it was "realistic" that Greece would return to borrowing markets before the end of 2014.

"We have a need for more money from the official sector. And there is a commitment to provide that. The Eurogroup has said 'we will do so if there is no return to markets," Thomsen said.