BUSINESS

Stathakis warns Greek debt will be a problem even in best-case scenario

TAGS: Economy

Greece called for a swift resolution of its debt crisis on Wednesday, saying that its debt mountain would remain unsustainable even in a post-recession era with healthy rates of growth.

The crisis-hit country has been lobbying hard to get its debt, which at 176 percent of GDP is the highest in the eurozone, back to manageable levels.

International lenders agree to the idea but have yet to agree how it will work. Speaking to Greek lawmakers, Economy Minister Giorgos Stathakis said it was “broadly acknowledged” that the debt pile would remain unmanageable even if the country met projections of a growth in output of 2.5 percent, inflation close to 2 percent, and recorded surpluses.

“Insofar that these assumptions are real, and are incorporated into the viability of debt – if we take all that into account – Greek debt is, in spite of all of that, non-viable,” Stathakis said.

The economy minister, a close associate of Prime Minister Alexis Tsipras, argued Greece could benefit from an extension of maturities on longer-term debt, smoothing out bumps in its repayment schedule and refinancing existing debt to the EU at lower interest rates.

[Reuters]

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