IMF attacks EU over Greek bailout

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The International Monetary Fund has criticised the bailout deal offered to Greece by the Eurozone.

A memo sent to EU authorities at the weekend and obtained by the FT urges debt relief for Greece on a scale “well beyond what has been under consideration to date”.

The Greek parliament is due to vote today on a raft of economic reforms agreed over the weekend as a condition of a third bailout worth €86bn over three years.

In the three-page memo, the IMF says Greece’s debt will peak at close to 200 per cent of GDP over the next two years. At the start of the eurozone crisis, Athens’ debt stood at 127 per cent.

The memo argues that some of Greece’s debt must be written off — something eurozone officials have fiercely resisted — for the country’s debt to fall to levels where it would be able to return to the financial markets.

It says: “Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.”

On Tuesday the IMF said it would not be able to disburse €16.4bn of its own funds that European officials are counting on unless an agreement on debt relief was concluded.