Sat, Jul 04, 2015 page15

• EU, IMF put pressure on Greece to accept reforms

  STABILITY: The IMF cut its forecast for Greek growth this year to zero, adding Athens would need at least US$55.5 billion to stabilize its economy over the next three years

  • AFP, ATHENS
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  The EU and IMF heaped pressure on Greece on Thursday, warning of the perilous state of the country’s finances, days ahead of a controversial referendum that could determine its future in the eurozone.

  As Greece’s leftist leaders staked their political lives on the outcome of tomorrow’s vote, the IMF warned the country’s growth prospects had deteriorated dramatically since the SYRIZA party came to power in January.

  The Washington-based lender slashed its forecast for Greece’s growth this year to zero, from 2.5 percent, and warned it would need at least an additional 50 billion euros (US$55.5 billion) to stabilize its finances over the next three years.

  The IMF — which along with the EU and ECB has lent Greece 240 billion euros since 2010 — also predicted any new bailout deal would rely more on Europe’s largesse, including 36 billion euros from Brussels.

  The bleak picture came as Greek Minister of Finance Yanis Varoufakis warned the government “may very well” resign if Greeks spurn its call to vote “No,” although Greek Prime Minister Alexis Tsipras cast doubt on whether he would definitely go in a TV interview.

  Exasperated leaders in Brussels warned the eurozone would be plunged into “unknown” territory if the Greek government got its way in the vote, which they said was effectively a referendum on the country’s place in the 19-country eurozone and even the EU.

  European Parliament President Martin Schulz told German business daily Handelsblatt his confidence in Greece’s leaders had reached “rock bottom” and said a “Yes” vote tomorrow would likely trigger new elections.

  Meanwhile, French President Francois Hollande warned a “No” could send the eurozone “into the unknown,” and Eurogroup President Jeroen Dijsselbloem said: “In case of a ‘No,’ Greece’s situation will become exceptionally difficult.”

  The stakes are high for the country’s 11 million people, who saw banks close this week and businesses shutter in the latest economic blow after years of painful recession and austerity.

  “Now it’s only the banks, but if there’s a run on supermarkets and fuel starts running out, it could lead to riots, to chaos, even to a coup by the sort of military junta, which seized the country in 1967,” Athens lawyer Georgiadis Aris said.

  Some EU officials have warned the outcome could determine Greece’s future in the euro and even the EU, although Italian Prime Minister Matteo Renzi — also grappling with huge debt issues— on Thursday sought to play down the risks.

  “As far as I’m concerned, Greece will not leave the euro. It will do all it can to reach an agreement” with its international creditors, Renzi said on Rai 1 TV.
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