The Greek crisis is moving towards a decisive face with more suspense. Fresh opinion polls for Sunday’s referendum indicate people airing ‘yes’ to bailout and Euro is increasing. This is despite Prime Minister Alexis Tsipras’ call for ‘No’ to the EU Plan and his description of EU creditors as blackmailers.
A victory for ‘yes’ will be interpreted as a vote of no- confidence in the ruling Syriza party’s ability to manage the economy.
In another development, the IMF has warned that Greece’s debt over the next three years is bigger and Athens need around €60 bn to overcome its debt problem.
The IMF who uses the general funds (of its all members) for bailouts seems to be taking a lesser role especially after its conflict with Tsipras.
IMF has also asked European creditors to sanction more money for a comprehensive bailout. Such a sizable and long term oriented restructuring of Greek debt is badly needed for a more durable solution. The IMF demand to Europe is to double expiry period of loans from existing 20 years to 40 years.
In the new assessment, the IMF has observed that Greek economy’s problems have worsened under Syriza. Anti austerity stand and stopping reforms like privatization has produced adverse effects.
In the coming days, Greece may face an immediate crisis from the possible run on banks as the government has imposed capital controls. People became frustrated at the sick working of the banking system as severe restrictions were made on withdrawals.
Over the last two days, Greek leaders who campaigns for ‘no’ hinted at renegotiation of the bailout terms. The Finance Minister Yanis Varoufakis has told that bailout negotiations would restart even if ‘no’ wins at the referendum.