IMF criticises 'unsustainable' Greek bailout deal

The International Monetary Fund (IMF) has attacked the EU's bailout terms to Greece and made public advice it gave to finance ministers over how to deal with the country's debt crisis.

This is the first time a disagreement between the IMF and the Eurozone has been made public.

In a statement published on the IMF's website, the fund says Greece's debt has become "highly unsustainable" with an estimated €85bn needed through 2018. The IMF added: "Greece's debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far."

The fund said that Greece's debts will peak over the next two years at 200 per cent of economic output, much higher than previous estimates.    

According to the BBC, the IMF shared its proposals with Eurozone leaders before a deal had been done, so the EU was aware of how unhappy the fund was.

Under the new bailout terms, Eurozone governments will contribute between €40bn and €50bn to Greece's new three-year bailout, with the IMF expected to contribute another lump sum. The rest will come from selling off state assets and the financial markets.

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