‘Greece’s pub­lic debt can be man­aged’

The Star Early Edition - - COMPANIES - Reuters

GREECE’S pub­lic debt can be man­age­able, the eu­ro­zone bailout fund said yesterday, re­spond­ing to a leaked re­port by the In­ter­na­tional Mon­e­tary Fund (IMF) that its debt would ex­plode to 275 per­cent of gross do­mes­tic prod­uct (GDP) by 2060.

A spokesman for the bailout fund, the Euro­pean Sta­bil­ity Mech­a­nism (ESM), said the path for Greek pub­lic fi­nances agreed be­tween Athens and the eu­ro­zone was cred­i­ble and backed by con­tin­gency mea­sures in case of un­fore­seen events.

Agreed re­forms

“We be­lieve that Greece’s debt bur­den can be man­age­able, if the agreed re­forms are fully im­ple­mented, thanks to the ESM’s ex­cep­tion­ally favourable loan con­di­tions over the long term and the re­cently adopted short-term debt re­lief mea­sures,” the ESM said.

In the doc­u­ment, seen by the Fi­nan­cial Times, the IMF cal­cu­lated that Greece’s debt load would reach 170 per­cent of GDP by 2020 and 164per­cent by 2022. But it would be­come ex­plo­sive there­after and grow to 275per­cent of GDP by 2060, the pa­per quoted the re­port as say­ing.

The spokesman said, how­ever, that the eu­ro­zone had promised to of­fer Greece ad­di­tional debt re­lief if Athens de­liv­ered on all its re­form prom­ises. “As a re­sult, we see no rea­son for an alarmistic as­sess­ment of Greece’s debt sit­u­a­tion.”

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