The nightmarish scenario about a debt at 200% of the GDP

The economic program implemented by Greece is at a crossroads, and the failures and delays that have been identified, according to the IMF, should bring the structural measures earlier, even from 2011. All this will be considered in the next evaluation in May, making the redrafting of the 2012-2014 measures the top priority.

As shown by the assessment report released from Washington, the IMF sets as a priority measures to find resources of more than 24 billion euros by 2014.

The report focuses on combating fraud, stressing that the government is required to clash with powerful interests to go through with it.

IMF’s estimates include the extremely negative scenario of a new outbreak of a banking crisis. Then, the debt might reach 200% of GDP and will start declining from 2013 onwards. It may decline further, by 16,5% by 2015 and 18% by 2020, if the privatizations move forwarrd.

The IMF also provides for:

* a 3% economic contraction for this year, and an upturn in 2012 with growth of 1,1% that will reach 2,1% in 2013-14
* an inflation reduction by 1% in late 2011 and maintaining it through 2012

* a 10% increase in competitiveness in the next 5 to 6 years also due to the favorable international environment
* recovery of tourism in comparison to 2010
* a possible further increase of spreads

Despite the delays and failure to control state payments, the IMF has given the go ahead to the disbursement of 8% in exchange for the measures of the 2012-2014 period, but also additional measures to reduce the deficit to below 3%. 

The IMF report has taken into account the last downgrade by Moody's, as stated by its authors, which however does not affect the substance of the assessment for Greece.

Although spreads rocketed to 900 units, the revised memorandum already leaves room for further downgrades by the rating agencies in 2011.