The recent IMF analysis has sparked consternation all over Europe, leading to the bitter realization that Eurozone countries will have to stand up for their out of control debts.
The total debt is about 360 billion euros and a major part of it falls on the shoulders of European taxpayers.
However, the US and other IMF member states had decided that it is time to put the whole truth on the table. In other words, the US has proclaimed a payday for the Eurozone, the newspaper wrote.
The US and all other states of the IMF – major emerging economies, in particular – suppose that the Europeans themselves must stand up for their own debts. Emerging markets have long grumbled about the fact that the IMF funds have been used for intra-European bailouts and not for the needs of developing countries, as it should be.
This is a big problem especially for German Chancellor Angela Merkel, who had always tried to convince her countrymen that European debt countries are on the right track. This fiction is no longer tenable after the IMF report, the article said.
A few weeks ago, the Spanish party Podemos started talks with the IMF to assess Spanish debt sustainability. It is expected that other crisis countries in the Eurozone will strive for a haircut as well.
According to the newspaper, budgets of the North European countries will face significant pressure. Some of financial difficulties will be hidden by technical tricks, not all of them will ‘disappear’ in this manner.
The referendum in Greece will basically signify a bitter beginning for the entire Eurozone. How this dramatic development will affect the Eurozone countries in the future is unclear, DWN wrote.