IMF Forecasts of New Greece Trouble

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The IMF has indicated that unless the economy of Greece responds quickly to reforms that another bailout may be necessary. It is hard to figure why austerity should provide an environment for GDP improvement, but there is still a school of thought that the two are compatible.

So far Greece has shown no ability to improve its economic fortunes. GDP continues to collapse at an alarming rate. There is almost no popular support for tax increases and cuts in pay and pensions.

The IMF’s concerns might as well be a warning of what will become true.

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