Exclusive: Europeans tried to block IMF debt report on Greece: sources

Before you go, we thought you'd like these...
What's Next for Greece?


Euro zone countries tried in vain to stop the IMF publishing a gloomy analysis of Greece's debt burden which the leftist government says vindicates its call to voters to reject bailout terms, sources familiar with the situation said on Friday.

The document released in Washington on Thursday said Greece's public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers.

It also said Greece will need at least 50 billion euros in additional aid over the next three years to keep itself afloat.

Publication of the draft Debt Sustainability Analysis laid bare a dispute between Brussels and the Washington-based global lender that has been simmering behind closed doors for months.

Greek Prime Minister Alexis Tsipras cited the report in a televised appeal to voters on Friday to say 'No' to the proposed austerity terms, which have anyway expired since talks broke down and Athens defaulted on an IMF loan this week.

55 PHOTOS
Greece Bailout Bankruptcy
See Gallery
Exclusive: Europeans tried to block IMF debt report on Greece: sources
A bank employee distributes tags with queue positions to pensioners as they wait outside the main gate of the national bank of Greece to withdraw a maximum of 120 euros ($134) in central Athens, Thursday, July 16, 2015. Greece’s troubled left-wing government is seeking urgent relief from European lenders on Thursday, after it pushed a harsh austerity package thought parliament, triggering a revolt in the ruling party and violent demonstrations in central Athens. (AP Photo/Emilio Morenatti)
Pensioners wait for the opening of the national bank of Greece to withdraw a maximum of 120 euros ($134) for the week in central Athens, Thursday, July 16, 2015. Greece’s troubled left-wing government is seeking urgent relief from European lenders on Thursday, after it pushed a harsh austerity package thought parliament, triggering a revolt in the ruling party and violent demonstrations in central Athens. (AP Photo/Emilio Morenatti)
Pensioners wait for the opening of the national bank of Greece to withdraw a maximum of 120 euros ($134) for the week in central Athens, on Friday, July 17, 2015. Greece on Thursday won vital pledges of support from bailout lenders needed to keep its economy from collapsing, but officials in Athens said the painful austerity measures demanded in return were likely to force an election within months.(AP Photo/Petros Giannakouris)
Pensioners wait for the opening of the national bank of Greece to withdraw a maximum of 120 euros ($134) for the week in central Athens on, Friday, July 17, 2015. Greece on Thursday won vital pledges of support from bailout lenders needed to keep its economy from collapsing, but officials in Athens said the painful austerity measures demanded in return were likely to force an election within months.(AP Photo/Petros Giannakouris)
Pensioners wait for the opening of the national bank of Greece to withdraw a maximum of 120 euros ($134) for the week in central Athens, Thursday, July 16, 2015. Greece’s troubled left-wing government is seeking urgent relief from European lenders on Thursday, after it pushed a harsh austerity package thought parliament, triggering a revolt in the ruling party and violent demonstrations in central Athens. (AP Photo/Emilio Morenatti)
People stand in queues as they wait to use the ATMs of two banks, after government's decision for limited daily cash withdrawals to 60 euros, in Athens, Saturday, July 4, 2015. Campaigns halted in Greece on Saturday on the eve of a closely watched bailout referendum — with voters in a dead heat over whether to defy creditors and push for better repayment terms or essentially seek new political leadership to find a compromise. (AP Photo/Thanassis Stavrakis)
People stand in a queue as they wait to use the ATMs of a bank, after government's decision for limited daily cash withdrawals to 60 euros, in Athens, Saturday, July 4, 2015. Campaigns halted in Greece on Saturday on the eve of a closely watched bailout referendum — with voters in a dead heat over whether to defy creditors and push for better repayment terms or essentially seek new political leadership to find a compromise. (AP Photo/Thanassis Stavrakis)
ATHENS, GREECE - JULY 03: Pensioners without ATM cards wait in queue outside a bank branch to withdraw money from their pension funds on July 03, 2015 in Athens, Greece. (Photo by Salih Baran/Anadolu Agency/Getty Images)
Pensioners stand in a queue outside a bank in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers were set to weigh Greece's latest proposal for aid Wednesday. (AP Photo/Daniel Ochoa de Olza)
A pensioner looks at customers who use an ATM as she sits outside a bank in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers were set to weigh Greece's latest proposal for aid Wednesday. (AP Photo/Thanassis Stavrakis)
An employee of a bank gives directions to pensioners in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers were set to weigh Greece's latest proposal for aid Wednesday. (AP Photo/Thanassis Stavrakis)
Pensioners stand in a queue outside a bank in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers were set to weigh Greece's latest proposal for aid Wednesday. (AP Photo/Thanassis Stavrakis)
Pensioners try to get a number to enter inside a bank in Athens, Wednesday, July 1, 2015. About 1,000 bank branches around the country were ordered by the government to reopen Wednesday to help desperate pensioners without ATM cards cash up to 120 euros ($134) from their retirement checks. Eurozone finance ministers were set to weigh Greece's latest proposal for aid Wednesday. (AP Photo/Daniel Ochoa de Olza)
People line up at ATMs outside a National bank branch in the northern Greek port city of Thessaloniki, Monday, June 29, 2015. Anxious Greeks lined up at ATMs as they gradually began dispensing cash again on the first day of capital controls imposed in a dramatic twist in Greece’s five-year financial saga. Banks will remain shut until next Monday, and a daily limit of 60 euros ($67) has been placed on cash withdrawals from ATMs . (AP Photo/Giannis Papanikos)
Pensioners wait outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
ATHENS, GREECE - JUNE 29: People wait in line to withdraw 60 euros from an ATM after Greece closed its banks on June 29, 2015 in Athens, Greece. Greece closed its banks and imposed capital controls on Sunday to monitor the growing strains on its crippled financial system, bringing the prospect of being forced out of the euro into plain sight. (Photo by Milos Bicanski/Getty Images)
A man withdraws the withdrawal limit of 60 euros at an ATM machine in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Elderly people, who usually get their pensions at the end of the month, wait outside a closed bank in the northern Greek port city of Thessaloniki, Monday, June 29, 2015. Greece's five-year financial crisis took its most dramatic turn yet, with the cabinet deciding that Greek banks would remain shut for six business days and restrictions would be imposed on cash withdrawals. (AP Photo/Giannis Papanikos)
Pensioners queue outside a closed branch of the Greek National bank in Thessaloniki on June 29, 2015 as Greece ordered its banks to shut for one week and imposed capital controls today, sending markets tumbling after its citizens emptied ATMs on the eve of a potentially disastrous default. In a ray of hope, creditors left the door open to Greece for a last-ditch debt deal, in order to try and avert a dangerous default that could spark a Greek eurozone exit and raise serious questions about the future of the European Union. AFP PHOTO / SAKIS MITROLIDIS (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
Foreign anti-EU activists protest in front of the Greek parliament in Athens, during a demonstration calling for 'NO' at referendum and for Greece's exit from the eurozone on June 28, 2015. Greek Prime Minister Alexis Tsipras stunned Europe late Friday with a surprise call for a July 5 referendum on the latest cash-for-reforms package and advised voters against backing a deal that he said spelled further 'humiliation'..AFP PHOTO / LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
Members of left wing parties hold placards reading in Greek ''There is no future in the European Union'' during a protest in Athens, Sunday, June 28, 2015. Greek Prime Minister Alexis Tsipras says the Bank of Greece has recommended that banks remain closed and restrictions be imposed on transactions, after the European Central Bank didn't increase the amount of emergency liquidity the lenders can access from the central bank. (AP Photo/Daniel Ochoa de Olza)
ATHENS, GREECE - JUNE 28: People wait in a queue in front of a bank's ATM to withdraw their cash in Athens, Greece on June 28, 2015. Greeks are anxious about whether the European Central Bank will increase the emergency liquidity assistance, banks can draw on from the country's central bank or not. (Photo by Ayhan Mehmet/Anadolu Agency/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Greek Presidential Guard conducts his ceremonial march as protesters attend an anti-austerity pro-government rally in front of the parliament building on June 21, 2015 in Athens, Greece. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 21: Protesters attend an anti-austerity pro-government rally in front of the parliament building in Athens, Greece, June 21, 2015. Greece's leftwing government believes it can reach a deal with its creditors on Monday. (Photo by Milos Bicanski/Getty Images)
A girl sits on her father's shoulders as she unfurls the Greek flag during a protest march in solidarity with Greece in the center of Brussels on Sunday, June 21, 2015. Heads of state in the eurogroup will meet in Brussels on Monday for a special summit to discuss the financial crisis with Greece. (AP Photo/Virginia Mayo)
Protesters hold national flags during an anti-austerity rally in front of the parliament in Athens, Greece, on Wednesday, June 17, 2015. Greece and its creditors publicly blamed one another for an impasse in bailout talks, on the eve of a eurozone finance ministers' meeting billed as key to their outcome. (AP Photo/Yorgos Karahalis)
Russian President Vladimir Putin, left, and Greek Prime Minister Alexis Tsipras arrive for their talks at the St. Petersburg International Investment Forum in St.Petersburg, Russia, Friday, June 19, 2015. (AP Photo/Alexander Zemlianichenko)
An army contingent stands below a fluttering Greek flag after a hoisting ceremony at the Acropolis hill in Athens, Greece Thursday, June 18, 2015. Greece and its creditors publicly blamed one another for an impasse in bailout talks, on the eve of a eurozone finance ministers' meeting billed as key to their outcome. (AP Photo/Yorgos Karahalis)
Greek Prime Minister Alexis Tsipras smiles while taking part in a wreath laying ceremony, at the monument for the founder of modern Greek state Ioannis Kapodistrias, in St. Petersburg, Russia, Friday, June 19, 2015. Russia is willing to consider giving financial aid to Greece, President Vladimir Putin's spokesman said Friday ahead of talks between the leaders of the two countries. (Valentin Yegorshin/Pool Photo via AP)
An army contingent carry a Greek flag in front of the temple of the Parthenon before a hoisting ceremony at the Acropolis hill in Athens, Greece Thursday, June 18, 2015. Greece and its creditors publicly blamed one another for an impasse in bailout talks, on the eve of a eurozone finance ministers' meeting billed as key to their outcome. (AP Photo/Yorgos Karahalis)
Greek Finance Minister Yanis Varoufakis , left, speaks with Managing Director of the International Monetary Fund Christine Lagarde during a round table meeting of eurogroup finance ministers at the European Council building in Luxembourg on Thursday, June 18, 2015. German Chancellor Angela Merkel is pressing Greece to deliver on commitments to carry out reforms, stressing that she wants the country to remain in the common currency. (AP Photo/Virginia Mayo)
Protesters holding national flags take part in an anti-austerity rally in front of the parliament in Athens, Greece, on Wednesday, June 17, 2015. Greece and its creditors publicly blamed one another for an impasse in bailout talks, on the eve of a eurozone finance ministers' meeting billed as key to their outcome. (AP Photo/Yorgos Karahalis)
A pro-euro protester waves a Greek and a European Union flag during a rally in front of the parliament in Athens, Greece, on Thursday, June 18, 2015. More than 5,000 people attended the rally in support of Greece remaining in the euro. About three-quarters of Greeks support keeping the EU's common currency, according to recent polls. Greece and creditors failed to reach an agreement Thursday in troubled bailout talks, with a June 30 deadline looming. (AP Photo/Yorgos Karahalis)
Managing Director of the International Monetary Fund Christine Lagarde, left, waits for the start of a media conference after a meeting of eurogroup finance ministers at the European Council building in Luxembourg on Thursday, June 18, 2015. Greece faced intense pressure Thursday from its international creditors to break a deadlock in bailout discussions that’s raised the specter of the country’s imminent bankruptcy and even its exit from the euro. (AP Photo/Virginia Mayo)
Pro-euro protesters shout slogans as they wave a European Union flag from the parliament during a rally in Athens, Greece, on Thursday, June 18, 2015. More than 5,000 people attended the rally in support of Greece remaining in the euro. About three-quarters of Greeks support keeping the EU's common currency, according to recent polls. Greece and creditors failed to reach an agreement Thursday in troubled bailout talks, with a June 30 deadline looming. (AP Photo/Yorgos Karahalis)
Pro-euro protesters wave Greek and European Union flags during a rally in front of the parliament in Athens, Greece, on Thursday, June 18, 2015. More than 5,000 people attended the rally in support of Greece remaining in the euro. About three-quarters of Greeks support keeping the EU's common currency, according to recent polls. Greece and creditors failed to reach an agreement Thursday in troubled bailout talks, with a June 30 deadline looming. (AP Photo/Yorgos Karahalis)
A pro-euro protester holds a placard which reads: "Yes to Europe", during a rally in front of the parliament in Athens, Greece, on Thursday, June 18, 2015. More than 5,000 people attended the rally in support of Greece remaining in the euro. About three-quarters of Greeks support keeping the EU's common currency, according to recent polls. Greece and creditors failed to reach an agreement Thursday in troubled bailout talks, with a June 30 deadline looming. (AP Photo/Yorgos Karahalis)
Dutch Finance Minister and chair of the eurogroup Jeroen Dijsselbloem speaks during a media conference after a meeting of eurogroup finance ministers at the European Council building in Luxembourg on Thursday, June 18, 2015. Greece faced intense pressure Thursday from its international creditors to break a deadlock in bailout discussions that’s raised the specter of the country’s imminent bankruptcy and even its exit from the euro. (AP Photo/Virginia Mayo)
ATHENS, GREECE - JUNE 3: A Greek flag billows in the wind on the Acropolis Hill on June 3, 2015, in Athens, Greece. Greek Prime Minister Alexis Tsipras is expected to be presented with the international creditors' plan of tough economic reforms for Greece in order to unlock 7.2 billion Euros of rescue loans later today. It is unclear whether Greece will accept the offer, as Tsipras has previously called for his own proposals to be considered by the creditors (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15:.Woman pass by Hellenic Exchange office in Athens on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images))
ATHENS, GREECE - JUNE 15: View of the index in the Hellenic Exchange office on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
Greece's Deputy Foreign Minister for international economic relations, Euclid Tsakalotos, arrives at the Prime minister's office for an emergency meeting, in Athens, Monday, June 15, 2015. Tsipras held an meeting with the team of Greek bailout negotiators, and said the talks had stalled on demands by the creditors — the other eurozone states and the IMF — for a new round of pension cuts, which his government rejected.(AP Photo/Petros Giannakouris)
A woman walks past Bank of Greece headquarters in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
A man reads a newspaper outside a kiosk selling souvenir bags in the Monastiraki tourist district of Athens on Monday, June 15, 2015. The European Commission said Sunday that weekend talks to find common ground between international creditors and Greece were unsuccessful and left a wide rift that needs to be closed within two weeks to avoid a possible Greek default.(AP Photo/Petros Giannakouris)
ATHENS, GREECE - JUNE 15: Locals visit the Green market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Pensioners play backgammon in front of closed shop on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
ATHENS, GREECE - JUNE 15: Women buy on cheep clothing at a flea market on June 15 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
A Greek flag is seen in a mini market in central Athens on Monday, June 15, 2015. The European Commission said Sunday that weekend talks to find common ground between international creditors and Greece were unsuccessful and left a wide rift that needs to be closed within two weeks to avoid a possible Greek default.(AP Photo/Petros Giannakouris)
A man walks past graffiti featuring the word 'Time' but using the Euro sign in place of the letter 'e'on a wall in Athens on June 15, 2015. Greek Prime Minister Alexis Tsipras insisted in an oped piece in a Greek newspaper on June 15, 2015 that Athens would 'wait patiently' until the International Monetary Fund and the European Union became 'more realistic', a day after last-ditch talks between the two sides collapsed, bringing the threat of a Greek exit from the euro closer than ever. AFP PHOTO/ LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
An elderly men stands outside the Athens central market on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
ATHENS, GREECE - JUNE 15: Local people pass by graffiti that says 'Greece vs Everybody' on June 15, 2015 in Athens, Greece. The European Commission has said that Greece and its international creditors need to come to an agreement within the next 2 weeks to avoid a possible default, after weekend talks collapsed. (Photo by Milos Bicanski/Getty Images)
People read newspaper's headlines in central Athens on June 15, 2015. Athens will patiently wait until its creditors become realistic, Greece's premier said, a day after last-ditch talks between the two sides collapsed and raised fears that Athens would default and exit the eurozone. AFP PHOTO/ Louisa Gouliamaki (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

It was not clear whether an arcane IMF document would influence a cliffhanger poll in which Greece's future in the euro zone is at stake with banks closed, cash withdrawals rationed and commerce seizing up.

"Yesterday an event of major political importance happened," Tsipras said. "The IMF published a report on Greece's economy which is a great vindication for the Greek government as it confirms the obvious - that Greek debt is not sustainable."

At a meeting on the International Monetary Fund's board on Wednesday, European members questioned the timing of the report which IMF management proposed at short notice releasing three days before Sunday's crucial referendum that may determine the country's future in the euro zone, the sources said.

There was no vote but the Europeans were heavily outnumbered and the United States, the strongest voice in the IMF, was in favor of publication, the sources said.

The Europeans were also concerned that the report could distract attention from a view they share with the IMF that the Tsipras government, in the five months since it was elected, has wrecked a fragile economy that was just starting to recover.

"It wasn't an easy decision," an IMF source involved in the debate over publication said. "We are not living in an ivory tower here. But the EU has to understand that not everything can be decided based on their own imperatives."

The board had considered all arguments, including the risk that the document would be politicized, but the prevailing view was that all the evidence and figures should be laid out transparently before the referendum.

"Facts are stubborn. You can't hide the facts because they may be exploited," the IMF source said.

IMF spokeswoman Angela Gaviria declined comment on this report.

POLITICALLY ANATHEMA

Greek Finance Minister Yanis Varoufakis said in a blog post the IMF had upheld the Syriza party government's contention for the last five months that debt relief should be at the center of the negotiations.

"Puzzlingly, all this fine research by the good people at the IMF suddenly evaporates when IMF functionaries coalesce with their ECB and the European Commission colleagues in order to impose upon our government their chosen policies," he wrote.

The IMF argues that Greece's debt burden of nearly 185 percent of gross domestic product can only be made sustainable if the euro zone provides considerable extra financing through a mixture of new loans and a debt restructuring.

19 PHOTOS
Financial impact of Greece crisis - global markets
See Gallery
Exclusive: Europeans tried to block IMF debt report on Greece: sources
Trader Gordon Charlop works on the floor of the New York Stock Exchange, Monday, June 29, 2015. Stocks closed with their biggest losses of the year as investors worry about fallout from Greece's worsening debt crisis. The Dow Jones industrial average dropped 350 points, or 2 percent, to 17,596. (AP Photo/Richard Drew)
Specialists Brian Fairbrother, left, and Russell Hewit work on the floor of the New York Stock Exchange, Monday, June 29, 2015. Stocks closed with their biggest losses of the year as investors worry about fallout from Greece's worsening debt crisis. The Dow Jones industrial average dropped 350 points, or 2 percent, to 17,596. (AP Photo/Richard Drew)
Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Monday, June 29, 2015. Stocks are falling in early trading in the U.S., but not as much as in Europe as Greece's debt woes deepen. (AP Photo/Richard Drew)
Trader Greg Mulligan works on the floor of the New York Stock Exchange, Monday, June 29, 2015. Stocks are falling in early trading in the U.S., but not as much as in Europe as Greece's debt woes deepen. (AP Photo/Richard Drew)
A specialist works at the post that trades National Bank of Greece, on the floor of the New York Stock Exchange, Monday, June 29, 2015. Anxious Greek pensioners swarmed closed bank branches Monday in the hope of getting their pensions, while queues formed at ATMs as they gradually began dispensing cash again following the imposition of strict controls on capital. (AP Photo/Richard Drew)
A screen above the trading floor of the New York Stock Exchange, shows the closing number for the Dow Jones industrial average, Monday, June 29, 2015. Stocks are closed with their biggest losses of the year as investors worry about fallout from Greece's worsening debt crisis. The Dow Jones industrial average dropped 350 points, or 2 percent, to 17,596. (AP Photo/Richard Drew)
A Malaysian men watch the trading board at a private stock market gallery in Kuala Lumpur, Malaysia, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Vincent Thian)
Malaysian men watch the trading board at a private stock market gallery in Kuala Lumpur, Malaysia, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Vincent Thian)
A Malaysian man watches a trading board at a private stock market gallery in Kuala Lumpur, Malaysia, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Vincent Thian)
People walk past an electronic stock indicator of a securities firm in Tokyo, Monday, June 29, 2015. Global stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. Japan's Nikkei 225 shed 2.9 percent to 20,109.95. (AP Photo/Shizuo Kambayashi)
A Filipino trader talks on his mobile phone in front of an electronic board showing a downward trend in trading at the Philippine Stock Exchange in the financial district of Makati, south of Manila, Philippines on Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Aaron Favila)
A Filipino trader walks in front of an electronic board showing a downward trend in trading at the Philippine Stock Exchange in the financial district of Makati, south of Manila, Philippines, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Aaron Favila)
A currency trader watches monitors at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. The Korea Composite Stock Price Index dropped 1.42 percent at 2,060.49. (AP Photo/Ahn Young-joon)
A currency trader covers his face with his hands at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Ahn Young-joon)
Currency traders work at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, Monday, June 29, 2015. Asian stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Ahn Young-joon)
Customers waits in line outside a money changer in Kuala Lumpur, Malaysia, Monday, June 29, 2015. Global stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. (AP Photo/Vincent Thian)
People wait to cross a street in front of an electronic stock indicator of a securities firm in Tokyo, Monday, June 29, 2015. Global stock markets sank Monday after Greece closed its banks and imposed capital controls in a dramatic turn in its struggle with heavy debts. Japan's Nikkei 225 shed 2.9 percent to 20,109.95. (AP Photo/Shizuo Kambayashi)
A pedestrian walks past an electronic stock board displaying the figure of the Nikkei 225 Stock Average, top right, outside a securities firm in Tokyo, Japan, on Monday, June 29, 2015. Japanese stocks fell and the yen strengthened as Greece moved to avert the collapse of its financial system after aid talks with creditors fell apart, raising the risk it could be forced to exit the euro zone. Photographer: Tomohiro Ohsumi/Bloomberg via Getty Images
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

This is politically anathema in Germany, the biggest creditor country, and most other euro zone states, where no leader wants to explain to taxpayers that the money they lent to Athens will never be coming back.

Euro zone governments insisted in five months of talks this year that a lengthening of loan maturities and a reduction in interest rates would only be considered after Greece had implemented its commitments under a 2012 bailout deal, including painful structural reforms and public spending cuts.

In Brussels, the way the IMF communicated the findings was seen as confusing, misleading and politically unhelpful.

The European Commission had produced its own debt sustainability analysis, based partially on IMF data, which is less pessimistic in its scenarios and is one of the documents mentioned on the Greek referendum ballot paper.

Diplomats said the IMF's publication of the study was a way of making clear it would only be part of any future loan pact with Greece if the Europeans included debt relief in the mix.

Germany and its north European allies have said the IMF's presence is indispensable both to win parliamentary backing for aid for any euro zone partner, and to keep the European institutions honest. Berlin suspects the European Commission of being too soft on Greek efforts to wriggle out of reforms of pensions, taxation, public sector wages and labor law.

The European Central Bank, the third partner in what used to be called the "troika" of bailout enforcers, is also keen to keep the IMF involved.

(Additional reporting by David Chance in Washington; editing by Anna Willard)

Read Full Story

People are Reading