Monday, January 30, 2017

No reason for alarm over Greek debt: ESM

Brussels (AFP) - There's no need for alarm over Greece's debt levels, a spokesman for the EU's rescue fund body told AFP Saturday, the day after a leaked IMF report described the problem as "explosive".
"We see no reason for an alarmist assessment of Greece's debt situation," said the spokesman for the Luxembourg-based European Stability Mechanism, or ESM.
"We believe that Greece's debt burden can be manageable, if the agreed reforms are fully implemented," he added.
His words were in contrast to the tone of a confidential International Monetary Fund (IMF) report obtained by AFP on Friday.
According to that report Greece's government debt remains highly unsustainable and will be "explosive" in the long run, requiring a more credible debt relief plan from Europe.
Even with full implementation of the economic reforms the country has agreed to, the Greek government will have to replace highly subsidised official financing with market financing at much higher rates, the IMF said.
The pessimistic report, although in keeping with the fund's repeated statements on the topic, makes it less likely the IMF will participate in any new European loan deal for Greece.
Without measures to ease the debt burden it will reach 275 percent of Gross Domestic Product (GDP) by 2060, against 160 per cent now, according to the IMF report which is due to be discussed by member states on February 6.


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