An IMF study has shown that Greece needs far more debt relief than European governments have been willing to contemplate so far. It comes as Greece's parliament debates the tough bailout reforms which threaten to break Syriza apart. Kirsty Basset reports.
Parts of Athens have come to a standstill as strikes grip the country. Protesters are angry about austerity measures demanded by a third bailout, needed to keep Greece in the euro. But now even the IMF is casting doubt on the deal. In a leaked confidential study, it says with Greek debt expected to peak at almost 200 percent of economic output over the next two years, the country needs far more debt relief than has so far been discussed. Bill Blain is a strategist at Mint Partners. (SOUNDBITE) (ENGLISH) BILL BLAIN, STRATEGIST, MINT PARTNERS, SAYING: "Everyone is very aware that it's highly unlikely that Greece is ever going to be in a position to honour all its debts, repay all the bailouts and get to a situation where it can also grow its economy. So restructuring its debts, and assistance is what's desperately required." Greece has repeatedly asked for debt relief - so far to no avail. But that may be about to change. Without it, the IMF may pull out of the bailout. That poses a huge dilemma for Germany. Chief economic advisor at CEBR, Vicky Pryce. (SOUNDBITE) (ENGLISH) CHIEF ECONOMIC ADVISOR, CEBR, VICKY PRYCE SAYING: "The IMF can perhaps put some pressure in the next few weeks on the Europeans to seriously look at other debt reductions through extending maturities and lowering interest rates or possibly an actual write-off itself - something the Europeans have so far resisted." The bailout package and its austere measures are being debated in Greece's parliament. Prime Minister Alexis Tsipras has said he doesn't believe in the deal, worth around 86 billion euros - but has told state television there's no alternative but to accept the measures to avoid economic chaos. The deputy finance minister has already resigned over it. Tsipras may need to rely on opposition votes to win approval. And that could mean big changes ahead. (SOUNDBITE) (ENGLISH) BILL BLAIN, STRATEGIST, MINT PARTNERS, SAYING: "I think it's very likely we will see a new government emerge. I won't be surprised to see Tsipras at the top if it, but it's not going to be called Syriza." If Athens passes the measures, the spotlight will turn to Germany's parliament, which meets on Friday.