Greece’s public debt is on a non- sustainable path even after a restructuring earlier this year, the nation’s Center of Planning and Economic Research said.
The country will not be able to cut its debt to 120 percent of gross domestic product by 2020, as required under a bailout from the European Union and International Monetary Fund, without “targeted policy interventions,” the state-run researcher, known as KEPE, said in a report today.
Such interventions include spreading out an 11.6 billion- euro ($14.6 billion) package of spending cuts, currently being finalized by the government, over four years instead of two, a reduction in the country’s interest rates and a “realistic” state asset-sales program, KEPE said. Without these changes the debt in 2020 could be as high as 151 percent of GDP, the center said.
Greece earlier this year reduced its debt load by about 100 billion euros, the biggest restructuring in history, after private-sector creditors agreed to write down the value of the government bond holdings. The government needs approval of its spending package by euro-area governments and the IMF to receive more funds under its 240 billion euros of bailout loans.
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