The “tug-of-war” between the IMF and German Finance Minister Wolfgang Schaeuble over the gasping Greek bailout program continued on Wednesday, with dpa quoting the powerful German minister as dismissing the Fund’s forecasts for long-term Greek economic growth as “unrealistic”.
The IMF last week revealed that is predicts average Greek GDP over the next 40 years would be an anemic 1 percent per annum. Conversely, European creditors, especially Germany, are calculating and expecting higher GDP growth rates for Greece, partly in a bid to allay arguments that debt relief measures for the country must be taken immediately and not after 2018 “if deemed necessary”.
The last point has repeatedly been uttered by Schaeuble.
“At this point we disagree with the IMF over its forecasts for growth in Greece over the next 40 to 50 years. The Fund is not ready to predict growth above 1 percent for the next 40 years,” Schaeuble was quoted as saying.
In a thinly veiled barb at the IMF, he added that the IMF's lackluster forecast for long-term Greek GDP growth is one of the reasons why “all the adjustment (bailout) programs proved futile. With 1 percent growth Greece would not be able to close the gap with the other Euro zone members.”
