Three goals in public debt management
Reducing the ratio of debt-to-gross domestic product at the fastest rate in Europe, achieving higher positions in the rating agencies’ scales and further reducing the cost of servicing the country’s borrowing, are the three main objectives set by the financial staff for the crucial issue of managing the Greek debt.
At the beginning of the year, Greece has had to show a reduction of 45 percentage points in the ratio of debt to GDP – from 205% of GDP to 160-161% – which also contributed to the recovery of investment grade.
For the next three years, the bar has been set even higher: The aim is to put Greece back close to the top positions of the rating tables of the six agencies – in 2009, Greek bonds were rated A, before the downfall began that sent them to the trash classification – but also for the ratio of debt-to-GDP to cease being the largest in Europe, which is something deemed feasible to be accomplished by 2026.
Further moves that will contribute to the achievement of this goal will begin immediately. Negotiations are already under way with partners in Europe in order to use the “cushion” of cash reserves, to finance new early repayments of Greek debt.
