the IMF is also recognizing that Greece will not meet the IMF 's budget targets for 2011 and 2012 . As a result , Greece 's public-debt-to-GDP level will soon rise to 172 % , or more than twice the level that might be considered manageable . As if to underline how unsustainable is the Greek situation , in the midst of the deepest of domestic recessions , the Greek government is now being required by the IMF to undertake further painful fiscal adjustment measures to meet its ever elusive budget deficit targets . Not only is the IMF insisting that Greece introduce an unpopular property tax , but it is also asking a Pan-Hellenic Socialist , or PASOK , government whose very existence depends on public sector patronage , to cut public wages and to reduce public employment . Little wonder that social and political tensions in Greece are now on the boil . The IMF is acknowledging that the Greek government will need more funding to finance its 2012 budget deficit . This is inducing the IMF to seek substantially greater debt reduction from Greece 's bank creditors through the `` voluntary '' debt exchange . As might
-LRB- CNN -RRB- -- After two years of denial about the European periphery 's solvency problem , European policymakers are finally , grudgingly , facing reality . They are recognizing that Greece is almost certain to default by year-end . And they have concluded that it is imperative to recapitalize Europe 's banks and to erect an effective `` firewall '' around Spain and Italy to reassure markets that if Greece defaults , the crisis will be contained there . But it remains to be seen whether this recognition will be translated into credible and effective measures by the time of the scheduled November 3 G-20 Summit . If past performance is any guide , one has to wonder whether this will be yet another doleful instance of domestic political constraints , especially in Germany and France , resulting in a `` too little too late '' European policy response to an ever deepening crisis . How deep ? Greece 's International Monetary Fund adjustment program is in tatters . The IMF itself is now acknowledging that Greece 's economy , which has already contracted by around 12 % since 2009 , will contract meaningfully further in 2012 . And