Former IMF official: Greek debt must be cut by 50%

Former International Monetary Fund (IMF) European Department Director until 2014 and supervisor of Poul Thomsen, Reza Moghadam, requested the write-off of half of Greece’s debt. In a letter to The Financial Times on January 26, the current Vice Chairman for Global Capital Markets at Morgan Stanley, admitted that both Greek bailout programs of 2010 and 2012 were designed based on optimistic assumptions on growth, inflation, fiscal efforts and social cohesion.[…]

Taking the above in account, the former IMF official proposed a generous haircut in exchange for reforms. Should the debt be less than 110% of GDP, as agreed in 2012, then it will become sustainable. What is needed, Moghadam concluded, is for Europe to overcome its taboos on debt relief.”


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