Friday, January 27, 2012
For Greece, the Outlook Is Still Grim
January 26, 2012
Even as Greece tries to convince creditors that its debt-reduction efforts are on track, gloomy new International Monetary Fund forecasts about its long-term economy are threatening to derail talks meant to secure the nation’s next big installment of bailout funds.
The concerns, stemming from an analysis that the I.M.F. has been quietly sharing with European officials and Greece’s creditors in recent weeks, come at a crucial time for Athens.
The new Greek government is in dual-track talks with private and public sector creditors, trying to make the case that its program for reducing long-term debt is working. The government seeks to persuade private creditors to provide relief by taking some losses on their bond holdings, and to persuade its public sector lenders to release a scheduled allotment of bailout money, possibly as much as 30 billion euros ($39 billion).
Without that next payout, the nation is almost certain to default when a bond repayment of 14.4 billion euros ($18.7 billion) comes due in March.