EU: Greek Debt Worsened, Country Still Needs Assistance

Business » FINANCE | April 25, 2014, Friday // 14:58| Views: 1231 | Comments: 0
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Bulgaria: EU: Greek Debt Worsened, Country Still Needs Assistance Greek Finance Minister Yannis Stournaras (C) has said the country will not need another bailout. Photo by EPA/BGNES

Greece must still rely on its international lenders to keep afloat, according to a report by the European Commission published Friday.

EU representatives note that country's debt forecast for 2020 is 125% of GDP, 1% up from the previous estimates.

For 2022, it is 112% of the economy, compared to the previous 110%.

The document quoted by Kathimerini explains the deterioration with "a lower forecast for nominal GDP, mainly reflecting a deeper adjustment in prices, a somewhat lower forecast for privatization revenue following delays in privatizing government assets and higher arrears clearance compared to the previous revue."

EC has also lowered by EUR 1.9 B its estimates on Greece's revenues from privatization putting them at EUR 22.3 B for the period until 2020.

A funding gap amounting to EUR 5.5 B is also expected by the EC until May 2015.

Though observing that the country successfully returned to bond markets in April, the Commission clearly sees international help is still needed.

The country could however expect in 2014 its first GDP increase for years, with an outlook for 2.9% in 2015 and 3.7% in 2016.

The European document came amid reports that Greece was to ask the "Troika" for a debt reduction.

Representatives of the IMF, the European Commission and the European Central Bank earlier agreed to give Athens its next three tranches of aid, but are deemed reluctant to agree on debt exemptions.

EC's forecast is nevertheless based on a possible further debt relief.

Despite seeking concessions from the EU, Greece is adamant it will not need a third bailout, as its Finance Minister Yannis Stournaras said some weeks ago.

Over the past year Athens has agreed with its international lenders on packages worth EUR 240 B aimed at helping the troubled  Eurozone country to reduce its debts. Austerity measures adopted in exchange of the bailout have triggered a deep recession which at some point has even led to suggesting Greece's exit from the euro area.

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Tags: EU, EC, European Commission, International Monetary Fund, greece, bailout, troika, report, debt
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