The Reich Chancellor is not going to be pleased. The International Monetary Fund apparently can't bite its tongue any longer and has come out foresquare against Angela Merkel's brutal austerity subjugation of Greece.
The IMF has updated its debt sustainability analysis to reflect the damage wrecked on the Greek economy since capital controls were imposed more than two weeks ago.
And it shows that even more Greek debt needs to be wiped away that Europe faced up to.
The IMF says:
“The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date - and what has been proposed by the ESM.”
Currently, eurozone countries have been talking about ‘reprofiling’ Greek debt, to push back repayment dates or cut the interest rate on loans.
But this IMF report states that Greece would need a 30-year grace period.
Alternatively, the eurozone could make explicit annual transfers of cash to Greece, or it could bite the bullet and take “deep upfront haircuts”.