The Greek government is scrambling to cope with an economic meltdown that has led to a sharp drop in bank reserves and triggered the worst financial crisis in decades.
The country’s central bank is warning that it will cut the value of its foreign currency reserves if it doesn’t get the debt deal it wants before the end of the year.
But the measures are proving tough to implement.
And the country is losing more and more of its cash, which it cannot pay its debts in.
“The situation is deteriorating and Greece is in a severe state of distress,” the International Monetary Fund said in a statement on Monday.
“A gradual recovery is urgently needed and is in the interest of the Greek people and the international community.”
Greek officials have warned that a prolonged economic collapse could lead to a sovereign default.
At a news conference, Finance Minister Yanis Varoufakis said that Greece is now “on a course of crisis.”
“There are two scenarios,” he said.
“One is that the government fails to meet its obligations, and the other, which is the case in most of the countries in the eurozone, is that they default on their debts.
The first scenario is not only politically unviable but economically disastrous.
The second scenario is extremely damaging to the country’s financial stability.”
The IMF is warning of “a serious economic shock” if Greece does not meet its debt obligations.
“It is important to stress that the Greek debt is a large and complex debt that Greece has already taken on and paid off,” the IMF said in its statement.
“If the debt is not addressed by the government, there will be a serious risk of default.”
The country is also running out of money to pay its creditors, which have been demanding an extraordinary bailout from the European Union and the International Criminal Court.
The IMF said the Greek government would need a “further increase in the capital stock” in order to pay creditors.
The Greek central bank says it is on track to reach its financial targets for the month of December.
It says it has taken measures to address the countrys financial problems and expects to meet the debt targets by March.
Greek Prime Minister Alexis Tsipras has repeatedly warned that the country will default on its debts, but he has so far been unable to convince the European Central Bank to lend it any money.
The EU and the IMF are expected to agree on a package of financial aid to Greece in the coming days.
Greek authorities have already said that they are prepared to pay as much as 10 percent of Greece’s debt.
But that could soon be more than double that, and it could also increase to as much 20 percent, the International Herald Tribune reported.
The International Monetary Committee on Monday warned Greece to consider the economic effects of default on the Greek economy, noting that a default could have a destabilizing effect on the country.
“Given that the primary risks to the financial system are external and the primary measures are taking place to support the financial sector, it is prudent for the Greek authorities to consider and assess the economic and political consequences of default,” the committee said.