The International Monetary Fund estimates that Greece needs debt relief and billions in loans to stay afloat till 2018. Not approved for release, the assessment was written before Greece announced a referendum on debt.
A 23-page IMF document dated June 26 warns that Greece would need an additional 50 billion euros ($55 billion) in financing and debt relief to get through the end of 2018. The draft of the IMF's latest debt-sustainability report preceded the announcement of a referendum on the latest deal offered by creditors and Greece's missing of a June 30 debt payment as part of the country's prolonged standoff with international creditors.
Greek government spokesman Gabriel Sakellaridis said the document "fully vindicates" Greece's position on debt sustainability and "constitutes a confession of failure" by the IMF.
The IMF, European Central Bank and European Commission have pegged future aid to Greece to tax increases and spending cuts. Prime Minister Alexis Tsipras, who took power nearly five years into the austerity regime imposed from abroad, asked voters to reject the "blackmail." With unemployment over 25 percent, and youth unemployment topping 50 percent, pensions may provide the only source of income for some families.
Tsipras said a "No" would give the country leverage: "Come Monday, the Greek government will be at the negotiating table after the referendum with better terms for the Greek people."
It remains unclear whether Greece would be able to continue using the euro currency should voters back their prime minister.
The government's credibility is riding on a "No" vote. On Thursday, Bloomberg TV asked Finance Minister Yanis Varoufakis if he would remain in his post should "Yes" win the vote. "I will not," Varoufakis said.
"When you go into battle, you don't talk about defeat," Varoufakis said, adding that the government "may very well" resign. He said he would "prefer to cut my arm off" before signing a deal that did not include debt restructuring and that creditors had treated the country as a "debt colony" with no rights.
The resignations could please some officials in Germany, where politicians have cheered loudest for Greece to impose new austerity. After addressing a meeting of the Organization for Security and Cooperation in Europe on Thursday, German Foreign Minister Frank-Walter Steinmeier told reporters that the European Union would "not be able to move things in one direction or the other" until after the referendum. He described himself as "no longer capable of deciphering the behavior of the Greek government."
European Parliament President Martin Schulz, a German Social Democrat and former Aachen bookseller, said his faith in Greece's government hit "rock bottom," and called for post-referendum resignations.
mkg/msh (Reuters, AFP, dpa, AP)