Wall Street Journal (WSJ) reports that the International Monetary Fund is pushing Eurozone lenders to let Greece skip paying interest or principal on bailout loans until 2040 and to extend the maturity period of loans until 2080.
Also, according to Wall Street Journal sources close to the proposal, the IMF wants the interest rate on Eurozone loans to be fixed for the next 30 to 40 years at its current average 1.5% level with all interest payments postponed.
Should the IMF proposal get accepted by Eurozone governments, Greece’s annual debt-service needs would be below 15% of its GDP, according to IMF’s less optimistic forecast.
The proposal was presented to European partners late last week. According to WSJ, one official from Eurozone country confirming the IMF proposal described it as “hardcore, really”.
European leaders appear reluctant so far and this is more than what they signed up for when agreeing to offer assistance to Greece to cope with her load of loans but it is political crucial for Germany that the IMF rejoins the Greek bailout as a lender. The IMF hasn’t yet signed up to the Greek program agreed last summer.
Read the full story here.