The IMF said today that its analysis did not point to Greece having to restructure its debt, noting the country had assets worth several hundred billion euros which it could sell.
Greece is being supported by an IMF/European Union rescue package worth €110 billion, but there is a widespread belief on financial markets that it will need an additional €60 billion over the next two years.
The International Monetary Fund's director for Europe, Antonio Borges, told a press conference hosted by the European Central Bank that the latest review of the aid programme in February had concluded that Greece's debt was sustainable.
It 'therefore does not require restructuring,' he added.
Financial markets and economists are questioning whether Greece will be able to pay back its debts on time however, or whether it might have to extend the repayment period or reimburse less than the full amount owed.
Despite a huge effort in 2010 - when hundreds of thousands of Greeks saw their wages and pensions trimmed and many lost their jobs - the country failed to meet its deficit reduction goals as the economy shrank faster than expected.
The next IMF review is due in June but 'at this point, on the basis of our programme we think that Greece should be moving in the right direction to as position where its debt is sustainable,' Borges said.
He noted meanwhile that the Greek government held hundreds of millions of euros in real-estate and 'other very valuable assets,' and said some could be sold to 'provide an additional element of credibility to the Greek situation.'
Borges said such a move would 'be most welcome'.
An agency which owned the state's property assets had a balance sheet of 'about €280 billion,' the IMF official said. Greece had committed itself to a programme of privatisations worth about €50 billion, he noted, but that 'is probably less than 20% of all the assets that the Greeks could privatise.'
No more aid without 'clear conditions': Germany
Greece will not receive any further aid from its European partners unless it tightens its belt further and submits to 'clear conditions', Germany's finance minister said today.
If it becomes clear that Greece needs additional assistance, 'it must be discussed what further measures are to be undertaken, especially by Greece,' Wolfgang Schaeuble said in parliament.
'We will not be able to agree to further measures without clear conditions,' he added.
Greece last year became the first member of the euro zone to receive a bail-out from the European Union and the International Monetary Fund. Ireland and Portugal have since followed suit.
The bail-outs have been highly unpopular among voters in Germany since it is the biggest contributor among European nations to the bail outs.
Speculation has mounted in recent days that Greece needs an additional €60 billion over the next two years to help the country overcome a mountain of debt.
Analysts have also suggested that a restructuring of €340 billion in public debts would be needed. Experts from the European Union, International Monetary Fund and European Central Bank began on Tuesday an audit of finances and reforms in Greece to determine if it merits more funding.
