IMF paints dark outlook for Greek jobseekers

ATHENS, Greece (AP) — Greeks can expect to struggle with double-digit unemployment for more than three decades, the International Monetary Fund predicted Friday in a bleak outlook for the bailout-dependent country.

In an annual report, the IMF also called for more ambitious debt relief plans from the country's European creditors. And it said that the budget targets the Europeans' have imposed on Greece will impede growth and prove hard to achieve.

The report said Greece's economic outlook is weak and urged deeper cuts in "unaffordable" pensions provided to current retirees. It called for a tax policy review involving lower overall rates, eliminating exemptions for the rich and greater efficiency in fighting tax evasion.

Greece's economy is under constant scrutiny from its bailout creditors, the IMF and European governments and institutions.

The left-led government is in negotiations with bailout inspectors on the course of mandated reforms, whose completion would allow release of a 2.8 billion euro ($3.14 billion) rescue loan installment.

The country has kept afloat on some 200 billion euros in bailouts released since 2010, in return implementing a series of spending cuts and reforms that improved fiscal stewardship but left Greek society in tatters. The economy has shrunk by a quarter, while unemployment is the highest in the 28-member European Union: Having hit a high of about 28 percent in early 2014, it remained at a bloated 23 percent in April-June.

"Looking forward, growth prospects remain weak and subject to high downside risks, and unemployment is expected to stay in the double digits until the middle of the century," the IMF report said.

It said current bailout commitments for Greece to post primary budget surpluses — that is, excluding the cost of debt servicing — of 3.5 percent from 2018 on are "unrealistic."

Greece also cannot be expected to "simply grow out of" its huge debt-to-GDP ratio, estimated at about 180 percent, the IMF said.

"Further debt relief will be required ... going well beyond what is currently under consideration, and it should be calibrated on realistic assumptions about Greece's ability to generate sustained surpluses and long-term growth," the report said.

The IMF has long been pressing for substantial debt relief from Greece's European creditors, who say they would consider reducing rates and extending repayment deadlines but rule out any reduction in the net value of the loans.

Greek Finance Minister Euclid Tsakalotos said he welcomed the IMF observations on the debt and high surpluses, but insisted that Greece has already passed its required pension and tax reforms — effectively ruling out further pension cuts.

That would be politically toxic for the government, which has already ditched its initial pledges to reverse creditor-imposed austerity and is lagging more than 7 points behind the main opposition conservatives in recent polls.