ATHENS (Reuters) – International lenders told Greece on Monday it must shrink its public sector and improve tax collection to avoid default within weeks as investors spooked by political setbacks in Europe dumped risky euro zone assets. Hours before a telephone conference between the Greek Finance Minister and senior officials of the European Union and the International Monetary Fund, the IMF representative in Greece spelled out steps Athens must take to secure a vital 8 billion euro rescue payment next [...]
For years, many analysts have pointed to the fact that Greece, along with several other Euro Zone countries, was living far beyond its means in terms of the debt load that it was generating. With standard interest payments, Greece is already far beyond the point of being able to repay its debts through its own revenue streams. As a result, the only way for Greece to avoid default, ironically, was to simply borrow more money to cover the existing debt [...]