Debt keeps rising to dizzying heights
The outstanding amount owed by Greece rose in the first few months of the year to 310 billion euros, as the government continues to wrestle with a growing pile of debt in a recessionary environment. Data from the Finance Ministry showed yesterday that Greece’s central government debt reached 310.3 billion euros at the end of the first quarter, up from 298.5 billion at the end of 2009. In a country with a population of some 10 million people, that figure means that each Greek owes 31,038 euros. A breakdown of the figures shows that 52.5 percent of debt will expire over the long term, meaning that it will be paid back in more than five years, while 35 percent of the money owed is payable in the next one to five years. Despite painful austerity measures having been launched by the government to secure European Union and International Monetary Fund loans to prevent it from defaulting, the government does not expect debt to start decreasing for several years. Finance Ministry estimates show that the debt will peak at 149.2 percent of gross domestic product in 2013, rising from 113 percent of output this year. The 110-billion-euro rescue plan is seen as buying time for Greece but the government needs to follow up with decisive reforms that will boost the economy’s competitiveness. Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development, said in Paris yesterday that Greece now has a «window to seek some solutions» to its fiscal crisis. «After May 19, Greece has a pretty flat payment schedule,» Gurria said. «There won’t be a liquidity problem. That’s a window to seek some solutions.» Meanwhile, Greece used the emergency loans to fully repay a 10-year, 8.5-billion-euro bond that matured yesterday, officials said. It was Greece’s perceived inability to redeem the looming May 19 bond that prompted the EU and IMF to come up with the emergency loan at the beginning of this month. The eurozone rescue was headed by German state bank KfW, which provided over 4.4 billion euros, while France gave more than 3.3 billion. Other euro members Italy, Spain, the Netherlands, Austria, Portugal, Luxembourg, Cyprus and Malta have also contributed.
