IMF mulls giving extra 10 billion euros to Greece: report

28th April 2010, Comments 0 comments

The International Monetary Fund is considering raising its financial aid to debt-stricken Greece by 10 billion euros (13 billion dollars), the Financial Times reported Wednesday.

The IMF has already offered Athens 15 billion euros as part of a rescue package with eurozone nations, which currently totals 45 billion euros.

But it was now looking at increasing the amount it would give to 25 billion euros, said the paper, citing unnamed senior bankers and officials in Washington and Athens.

"The fund's current ceiling for Greece is 25 billion euros and the release of the extra amount is under discussion," an Athens-based analyst familiar with the talks told the FT.

The fund would make the loan available under a planned three-year loan, said the analyst.

The IMF declined to comment to the paper.

The news came after Greece's credit rating was downgraded to "junk" status Tuesday by Standard & Poor's, in a move which sent European financial markets tumbling.

The euro dropped against the dollar and stocks and bonds plunged, with investor fears spreading to other weak euro area economies such as Portugal and Spain in what analysts said showed "contagion" from the Greek crisis.

IMF head Dominique Strauss-Kahn also warned Tuesday that Greece faces an "untenable situation" if it does not get help to remain solvent, according to the French daily La Tribune.

"I am not saying that if we help them it will be easy. It will be difficult. The Greeks have to be aware that sorting out their public accounts, after several years of reckless overspending, will be painful and difficult.

"But there is no other solution," Strauss-Kahn said.

As well as the IMF loan, Greece's 15 euro currency partners offered earlier this month to provide 30 billion euros of rescue loans at below market rates.

© 2010 AFP

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