The IMF has said Greece needs an additional €71 billion in European Union aid and €33 billion from private creditors to weather its debt crisis.
The International Monetary Fund, in a report on the state of its massive loan to Athens, said it intended to continue its financing, but predicted a deeper 2011 recession than previously thought in Greece, with the economy contracting 3.9%.
'For the purpose of this assessment exercise, it is assumed that voluntary rollovers/maturity extensions reduce financing needs by €33 billion through June 2014,' the IMF wrote in a section titled 'Private sector involvement.'
The IMF also pushed back Greece's return to debt markets to 2014.
The IMF said euro zone countries needed to decide how they would help Greece and that private sector involvement in a second bail-out for the country was appropriate.
'Given the impact PSI could have on Greece's credit rating, it is imperative for euro area member states to put in place mechanisms to guarantee liquidity support to Greece's banking system while a PSI operation is undertaken,' it said.
Asked whether the IMF would provide further support to Greece, Thomsen said no request had been made.
The IMF revised its projections for growth, saying GDP would contract by 3.8% this year, compared to 3.0% predicted in the previous review, and said debt would peak at 172% of GDP in 2012.
'This programme does face significant implementation risks going forward but it represent the best option to resolve Greece's challenges and avoid broader contagion in Europe,' the IMF said.
Fitch ratings agency announced this evening that it was downgrading Greece's status by three points to CCC status from its previous rating of B+.
The move came because of the absence of a new European Union-International Monetary Fund programme for Greece and growing uncertainty of the role private investors would play in any bail-out, said the agency.
Earlier, Germany suggested that it is 'possible' for the European Financial Stability Fund to buy back the bonds of a country in financial trouble.
'It is already now theoretically possible for a state to receive financial aid and then to use some of this to buy back its debt,' finance ministry spokesman Martin Kotthaus told a news conference in Berlin.
European Investment Bank chairman Philippe Maystadt - who took part in a meeting of EU finance ministers - said yesterday that the euro zone planned to relieve Greece's debt mountain by buying back Greek bonds at going rates on the secondary market.
Euro zone finance ministers on Monday agreed to beef up the size and scope of the EFSF, a rescue fund set up in the aftermath of last year's Greek bail-out which has a current lending capacity of €440 billion.
Italy on track for budget deficit target - Fitch
Meanwhile, ratings agency Fitch has said that Italy is on track to achieve its target of reducing the budget deficit to 0.2% of output by 2014.
‘The stable outlook on Italy's sovereign ratings is based on Fitch Ratings' expectation that the government is likely to succeed in reducing the budget deficit as planned,’ the agency said in a statement.
The deficit was at 4.6% of gross domestic product last year.
‘In the absence of negative shocks, adherence to the fiscal targets set out by the government would be consistent with stabilising Italy's sovereign credit profile and rating at AA-,’ it added.
While the two other main ratings agencies, Moody's and Standard and Poor's, have warned Italy in recent weeks of a possible downgrade, Fitch has not done so.
‘The Italian government has set out an ambitious fiscal consolidation plan that would balance the budget by 2014 and firmly place the public debt to GDP (gross domestic product) ratio on a downward path,’ it added.
Kenny dubious on debt summit
RTÉ News understands that a proposed summit of euro zone leaders is now less likely to go ahead.
A well placed source said that Herman Van Rompuy, the president of the European Council, was looking for 'looking for dates that suit 17 leaders. Friday seems difficult.'
There have been contradictory statements throughout the day between Berlin and Paris over whether or not an emergency summit would go ahead.
Earlier, Taoiseach Enda Kenny voiced opposition to the idea of a summit in response to Greek debt contagion and the downgrading by Moody's ratings agency of Irish debt to junk status.
'Moody's problem is not with Ireland, Ireland's problem is with Europe,' Mr Kenny told the Dáil.
'There is no point in having a meeting that won't bring about a conclusion in a comprehensive sense to something that is not going to go away unless it is dealt with.'
He said if such a meeting goes ahead, it has to grasp the nettle and set out Europe's response to the contagion which was causing anxiety and concern.
He said it was time the financial crisis was responded to comprehensively and decisively.
France favours holding an emergency summit of euro zone countries, government spokeswoman Valerie Pecresse said.
President Nicolas Sarkozy told a cabinet meeting that 'France has always supported the holding of eurogroup meetings in case of need' and backs the summit currently being considered in Brussels, she told reporters.
Germany, though, has played down the need for a crisis summit, saying such a meeting was not in the offing.
'There are no concrete plans for such a special summit,' government spokeswoman Sabine Heimbach told a regular news conference.
'The important thing, and that is also the view of the chancellor, is that the work of the finance ministers on the Greek rescue package continue at full speed.'
In Brussels, diplomats said 'a meeting of euro zone leaders is under consideration,' while Van Rompuy said in Madrid that a summit 'has not been excluded'.
It would be up to Van Rompuy to summon such a meeting, Heimbach acknowledged.
Draghi: Solvency can no longer be taken for granted
Separately, the future head of the European Central Bank has said the solvency of euro zone states can no longer be taken for granted as it was in the past.
Mario Draghi, the current Italian central bank governor, said solvency had to be earned with sustainable growth, which was possible only when a country's public finances were in order.
In a speech in Rome, he added that it was 'essential' that Greece, Ireland and Portugal, which are receiving credit from the European Union and the International Monetary Fund, continue with 'significant efforts' to reform.
Mr Draghi also called for additional cuts in Italy's public spending to avoid tax increases, amid growing concern about the country's position on euro zone financial markets.
He emphasised that budget austerity measures had to be outlined 'very rapidly'.
The Italian parliament is scrambling to adopt austerity measures this week following heavy pressure on stock and bond markets in recent days.
