In a new report on Greece's financing needs, the IMF also cut the country's economic growth prospects for this year to zero percent from 2.5 percent forecast in April. That growth estimate was made before Greece broke off talks with official creditors last weekend and ordered capital controls and its banks shut for a week.

The IMF's new 'preliminary draft' debt sustainability analysis for the country said the changes in Greek policies and its financial outlook since early 2015 -- roughly covering the period that the anti-austerity Syriza party and Prime Minister Alexis Tsipras have led the country -- 'have resulted in a substantial increase in financing needs'.

Existing proposals by the Greek side and EU creditors do not address those needs. "Greece faces a significantly larger financing need going forward than we thought last year," a senior IMF official told journalists.

The new analysis suggests that 'a more comprehensive debt operation will be required to ensure that debt will remain sustainable,' the official said. On top of the need for more cash, the IMF said creditors need to double the maturity of existing official loans to Greece to 40 years from 20 years.

"This is a dramatic move," the official said.


Latest News  from Business News Desk