Greece was supposed to get it’s debt to GDP ratio to 100% by 2012, then 100% by 2013, then 110% by 2014. Now Jeroen Dijsselbloem, president of the Eurogroup finance ministers, says Greece May Get Still More Time to meet fiscal targets.
And the alleged level of debt sustainability keeps rising all the while.
The euro zone may give Greece more time to meet fiscal targets agreed under its international bailout, the chairman of the euro zone finance ministers said in an interview published today.
“The Commission΄s approach regarding fiscal consolidation is more flexible, giving certain countries more time to meet their targets. I believe that this will be the case for Greece if needed,” Jeroen Dijsselbloem told Kathimerini newspaper.
Greece΄s European partners agreed last year to extend the maturities and reduce the interest on the nation΄s bailout funds to help cut its debt mountain to a more sustainable level of 124 percent of GDP in 2020, from an estimated 173 percent this year.
Greek Debt Unchanged After Massive Bailouts and Haircuts
Note that the sustainable level of debt is now 124% of GDP, ratcheted up numerous times in the past couple of years..
Keep Talking Greece has some rather interesting facts about Greek debt in its report 2 bailouts + 1 haircut = Greek public debt at €309.4 billion in 1Q 2013, as much as in 2010
Two bailout agreements, total aid of 240 billion euro, and one bonds’ ‘haircut’ later…. Greek public debt remains as high as it was in 2010 – the year in which Greece sought the ‘rescue’ by the International Monetary Fund.
2010: Public debt: 310.3 billion euro
2013: Public debt: 309.4 billion euro
The public debt is almost the same, we are all still sitting on the same old boat. Just the economic situation of the average Greek is much worse: bankrupt households, unemployment at 27% and 64% among youth 15-24 years old, recession and even deflation. Oh, and a sharp rise in suicides and homeless.
I hope nobody remembers Evangelos Venizelos, finance minister in March 2012, heralding after the Greek bond swap (53.5% haircut) “we got rid of 100 billion euro debt.”
More Time Is Useless
By now it should be readily apparent the situation is totally and completely hopeless.
Greece will not reduce debt to 124 percent of GDP by 2020 from an estimated 173 percent this year, unless of course Greece defaults.
Mike “Mish” Shedlock