EU, IMF heap pressure on Greece days ahead of crucial vote
The EU and IMF heaped pressure on Greece, warning of the perilous state of the country's finances, days ahead of a controversial referendum that could determine its future in the eurozone
Athens: The EU and IMF heaped pressure on Greece on Friday, 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 Sunday's vote, the International Monetary Fund 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 per cent, and warned it will need at least an additional 50 billion euros (USD 55 billion) to stabilise 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 Finance Minister Yanis Varoufakis warned the government "may very well" resign if Greeks spurn its call to vote 'No', although Prime Minister Alexis Tsipras cast doubt on whether he would definitely go in a television 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 on Sunday would likely trigger new elections.
French President Francois Hollande, meanwhile, warned a 'No' could send the eurozone 'into the unknown', and the head of the Eurogroup of finance ministers, Jeroen Dijsselbloem, said: "In case of a 'No', Greece's situation will become exceptionally difficult."
Campaigning for the referendum kicked off in earnest on Friday, with Greece's leaders saying a 'No' vote would strengthen their hand in debt talks while EU leaders have cast it as a consultation on the country's membership of the eurozone.
There is also a chance the referendum may yet be cancelled or suspended: Greece's top administrative court, the Council of State, is to rule tomorrow on its legality.