Reuters: EU/IMF say bailout can make Greek debt sustainable, but risks remain

13 March 2012

An updated debt sustainability analysis by international lenders showed that the package of new financing, debt restructuring and reforms can put Greek debt on a sustainable path, but Athens will have to stick to good policies until 2030 to make it work.

The analysis, prepared by the European Commission, the European Central Bank and the International Monetary Fund, showed that after the debt swap at the weekend, Greek debt could fall to 116.5 per cent of GDP in 2020 and below 90 per cent in 2030.

"Results show that the programme can place Greek debt on a sustainable trajectory", said the analysis. "However, there are significant risks that debt declines may be interrupted or even reversed by shocks. Under an alternative, less favourable scenario, the debt ratio in 2020 would still be above 145 percent of GDP", the document said.

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