By now it should be clear to all that the only reason why Germany has been so steadfast in its negotiating stance with Greece is because it knows very well that if it concedes to a public debt reduction (as opposed to haircut on debt held mostly by private entities such as hedge funds which already happened in 2012), then the rest of the PIIGS will come pouring in: first Italy, then Spain, then Portugal, then Ireland.

The problem is that while it took Europe some 5 years to transfer a little over €200 billion in Greek private debt exposure to the public balance sheet (by way of the ECB, EFSF, ESM and countless other ad hoc acronyms) at a cost of countless summits and endless negotiations, which may or may not result with the first casualty of the common currency which may prove to be reversible as soon as next week, nobody in Europe harbors any doubt that the same exercise can be repeated with Italy, or Spain, or even Portugal. They are just too big (and their nonperforming loans are in the hundreds of billions).

And yet, today, in a stunning display of the schism within the Troika, it was the IMF itself which explicitly stated thatGreece is no longer viable unless there is both additional funding provided to the country, which can only happen if there is another massive debt haircut. 

This is what the IMF said:
Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end - 2018, the debt-to-GDP ratio is projected at about 150 percent in 2020, and close to 140 percent in 2022 (see Figure 4ii). Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30 percent of GDP would be required to meet the November 2012 debt targets. With debt remaining very high, any further deterioration in growth rates or in the medium term primary surplus relative to the revised baseline scenario discussed here would result in significant increases in debt and gross financing needs (see robustness tests in the next section below). This points to the high vulnerability of the debt dynamics.
And the kicker:
"these new financing needs render the debt dynamics unsustainable."
Bingo, because that is, in a nutshell, precisely what Tsipras and Varoufakis have been claiming since day one. As expected, a Greek government spokesman promptly said that the IMF report is in line with the Greek government's view on debt.

What makes the IMF report even more odd, is not so much its content and position which have been largely known for quite some time now, but its timing: just three days before the Sunday referendum, Tsipras now has prima facieevidence to wave in front of the Greek people and say "see, we were right all along."

It is exactly the case that only a "No" vote at this point would allow Greece to continue a negotiation which has already seen one of the three Troika members side with the Greek position. Should Greece vote "Yes", it will make any future negotiation with the Troika impossible, and while the country will get a few months respite the resultant bank run after the bank reopen with the ECB's blessing will mean that all Greece will do is buy itself a few months time. Only this time all the debt will still be due.

And, should they vote "Yes", this time the Greeks will only have themselves to blame for all the future pain, pain which will continue well after the mid-point of this century.

But ignoring Greece for a minute, what the IMF's "debt sustainability analysis" has just done is open the door forevery single other comparably insolvent peripheral European nation to knock on Christine Lagarde's door and politely ask:
"Mme Lagarde, if Greece is unsustainable, then why aren't we?