NEW YORK (TheStreet) - Just when you thought it was over, Greece is back spooking the market.
As thousands of Greeks rioted Wednesday night while the country's parliament voted on the latest bailout plan, fresh doubts emerged whether anything can save Greece from financial collapse.
If Greece wants to avoid defaulting on all its obligations, it will need 30 years to repay all of what it owes to its fellow European Union members, according to an IMF report leaked to Reuters on Tuesday and made publicly available later that day. That's about twice as long as the deal struck early Monday would allow.
The report emphasized that actions taken by the Eurozone at the end of June to minimize the immediate effects of a default on the Greek economy, including capital controls and closing Greek banks, were "extracting a heavy toll on the banking system and the economy."
For example, Greece's debt will continue to grow, peaking at 200% of gross domestic product by 2017, the report said. Two weeks ago, the IMF said Greece's debt levels had already peaked at 177%.
For a rescue package, those actions have raised the total amount Greece needs over the next three years to €85 billion, according to a preliminary figure from the report. That's €25 billion more than the IMF projected two weeks ago.
Only a relief program of that size and with adjusted repayment conditions would meet the Fund's standards, an IMF official told reporters on Tuesday. With Greek Prime Minister Alexis Tsipras appearing to have enough votes to get the bailout deal approved at the Greek parliament by a Wednesday deadline - despite protests from Greek citizens as well as his own party - that leaves open the possibility that the IMF may not have any role in a third Greek bailout.
Not having the IMF in the picture could make any future negotiations with the EU harder for Greece, said Brean's Tchir. While Tsipras and his government have often appeared hostile toward Greece's creditors, including the IMF, the findings of the Fund's reports have supported Tsipras and others who campaigned against new austerity measures.
An IMF report published on July 2, days before Greece's referendum on a version of the bailout plan, bolstered the case for opponents of a bailout plan as presented by Greece's creditors. "The IMF is the closest thing they have to a friend," Tchir said.
The absence of the IMF could also make it even harder for Greece to court foreign investment. Many investors who put money into low-grade Greek debt at the beginning of the country's crisis did so expecting a bailout funded by the IMF or the European Central Bank if things went wrong, said Linda Lim, a professor of strategy at the University of Michigan's Ross School of Business.
Whether wise investments or not, those choices illustrate how keeping the IMF at the ready can reassure investors.