Greece's Financial Situation Far Worse Than Reported

Reuters: Exclusive - Greece needs debt relief far beyond EU plans: secret IMF report

Greece will need far bigger debt relief than euro zone partners have been prepared to envisage so far due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters shows.

The updated debt sustainability analysis (DSA) was sent to euro zone governments late on Monday, hours after Athens and its 18 partners agreed in principle to open negotiations on a third bailout programme of up to 86 billion euros in return for tougher austerity measures and structural reforms.

"The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date - and what has been proposed by the ESM," the IMF said, referring to the European Stability Mechanism bailout fund.

WNU Editor: Why am I not surprised by this report .... the banks are still closed, credit is non-existent, and government employees are probably going to be paid with IOUs this week. But the problem in Greece is not that they are broke .... which they are .... it is just that over the years the population and the government have developed a sense of entitlement and mindset that the rest of Europe will pay their bills .... and now they are facing the reality that such a deal is not going to happen. This is a profound psychological shock to a society that many Greeks have grown accustom to .... and my prediction is that for many of these people they are never going to recover from this crisis. I go back to my experience of what I saw and experienced in Russia when its financial system collapsed in the 1990s. For many Russian senior citizens, government workers, people dependent on the state .... they never recovered when everything imploded ... and the eventual outcome for many of these Russians was crime, alcoholism, drug addiction, suicide, depression, homelessness, and early deaths. This is my prediction for for the future of Greece .... coupled with a mass migration of the country's best and brightest.