IMF admits Greece needs extra help to make debt sustainable

The International Monetary Fund has conceded that Greece's debts are unsustainable and that the country needs around $60 billion in financing and debt relief over the next three years if it is to have any hope of fixing its crumbling economy.

The intervention Thursday from the IMF came just three days before Greeks hold a national referendum on whether to accept bailout proposals from its international creditors, of which the IMF is one, that would in theory clear the way for Greece to receive a new aid package as early next week.

The IMF's findings were part of an analysis it conducted prior to Athens imposing capital controls (limits on cash withdrawals) on its banks this week as it attempts to stave off a complete breakdown of its financial system after it missed a loan repayment to the IMF on Tuesday.

Greek Finance Minister Yanis Varoufakis said Friday that regardless of the outcome of Sunday's referendum there will be a deal. He said, speaking to an Irish broadcaster, that an agreement was "more or less done," adding that although official discussions between Greece and its creditors had been on hold, private talks had taken place.

On Thursday, Varoufakis said he would resign if Greece votes "yes" to accept the bailout demands.

Athens is holding a national referendum on the terms even though the bailout, a $270 billion aid program it received during the financial crisis, technically expired on Tuesday.

Greece this week missed a $1.8 billion repayment on the loan.

Varoufakis said he would prefer to "cut my arm off" than sign an agreement with the International Monetary Fund, European Central Bank and European Commission that does not include debt relief or restructuring.

"(Why) would you invest in a country whose debt is not sustainable?" Varoufakis said.

Varoufakis' comments came in an interview with Bloomberg television after Greece's Prime Minister Alexis Tsipras accused its trio of creditors Wednesday of blackmailing Greek voters into accepting a deal that was not in the nation's best interests.

"The sirens of destruction are blackmailing you to say 'yes' to everything without any prospect of exiting the crisis," he said, in a nationally televised address.

Varoufakis said Thursday he would quit as finance minister if the Greek electorate did not back the government's position.

However, he said, "we are unreconstructed democrats. We are going to take this (referendum) to the Greek people and if the Greek people say 'yes,' we will do whatever it takes to ensure it's signed," Varoufakis said.

"Maybe we will change the configuration of the government. Some of us may not be able to stomach it," he added.

He expressed confidence that voters would chose to support the government in the referendum and vote "no" and said that Greece's banking crisis was more political than financial.

"What is happening here is a political position by Europe to shut the banks down as a way of effectively pushing us to accept a non-viable agreement at a political level, so this is a political crisis, it's got nothing to do with the banks. Once the political crisis is over, after the Greek people deliver their verdict, the banks will open," Varoufakis said.

After a week-long closure, Greece's banks are scheduled to reopen Tuesday. The government closed them amid tight liquidity conditions.

Even though Greece appeared to sweeten a last-minute bailout proposal to eurozone officials Wednesday, European leaders led by German Chancellor Angela Merkel are insisting that the country hold the referendum before talks resume.