The IMF has called on Greece to give up control over its budget in exchange for the next tranche of the 110 Billion euro bailout fund. The country has slashes wages, raised taxes, and cut jobs,only to see its economy shrink for four straight years.
The debt to GDP ratio has grown over the four year period.The IMF has urged Eurozone public debtholders of Greek bonds to take larger haircuts, as the country is in worse shape than thought.
Greece is already in talks with private sector bondholders, including banks and pension funds to take haircuts on the bonds.The private creditors are represented by the IIF the Institute for International Finance.
Greece needs its creditors to wipe away 70% of the value of the bonds they hold. The current debt to GDP is greater than 160%,and the new dealwould shave it to 120%.
George Soros has predicted that Greece will default and exit the Eurozone. The UK PM Cameron wants the Eurozone to do more before relying on the IMF which the UK contributes to.
The country which had four straight years of economic decline, badly needs the deal where private creditors agree to take haircuts on its bonds. An outline deal, hurriedly endorsed by Brussels, came after a frantic three days of negotiations that at one time appeared to be heading for deadlock.
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