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Greece needs debt relief “far beyond” what European creditors have been willing to consider, including possibly deep “haircuts” on the value of Greek debt, the IMF said in a new analysis.

Bank closures and capital controls have exacted a “heavy toll” on Greece’s financial system and the economy, leading to a dramatic deterioration in the ability of the country to pay its debts, the International Monetary Fund said in a preliminary debt-sustainability analysis released Tuesday.

“Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far,” the IMF said in the analysis, which follows a similar study released July 2, before Greece held a referendum that rejected creditors’ proposal.

The IMF now estimates Greece’s debt to peak at close to 200 percent of gross domestic product in the next two years. In its analysis released July 2, the Washington-based fund said nominal gross public debt was on track to reach about 170 percent of GDP by 2017.

The IMF said the projections are subject to “considerable downside risk, suggesting that there could be a need for additional further exceptional financing from euro-member states.”

The fund said there are several options for bringing Greece’s finances under control. Providing debt relief by extending maturities would require a “very dramatic extension” on the order of 30 years on the entire stock of European debt, including new assistance, according to the IMF.

“Other options include explicit annual transfers to the Greek budget or deep upfront haircuts,” the IMF said in its analysis. “The choice between the various options is for Greece and its European partners to decide.”

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