Greece will need €50bn over the next three years just to break even, warns IMF

Greece needs €50bn over the next three years to stabilize its finances even under existing creditor plans, the IMF has said. In a new report, the International Monetary Fund acknowledged a huge deterioration in the country’s prospects in recent months. Details from the report emerged as police clashed with far-left protesters in Athens on Thursday night. Officers used tear gas and pepper spray to stop demonstrators trying to storm EU offices in the capital. The IMF report has slashed Greece’s 2015 economic growth forecast to 0%, from 2.5% forecast in April.

Very significant changes in policies and in the outlook since early this year have resulted in a substantial increase in financing needs.

IMF draft report

Its banks have shut for a week, all of which has further stifled economic activity. The new “preliminary draft” analysis of Greece’s finances highlighted the deterioration since Prime Minister Alexis Tsipras took power at the beginning of 2015. The report comes ahead of Sunday’s referendum on existing bailout terms. The European Commission wants Greece to raise taxes and heavily cut welfare spending to meet its debt obligations. But Mr Tsipras has urged Greeks to vote “No” to the creditors’ bailout proposals, saying a rejection will lead to a “better agreement”. Last night he said a deal with the country’s creditors would be struck 48 hours after any rejection of the terms in the referendum.

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