ESM: Greece will Not Need Debt Relief if it Reaches 3% Primary Surpluses for 20 Years

Thursday, May 25th, 2017
Last Update: 16:05

Greece will not need any debt relief from the euro zone if it keeps achieving a primary surplus of above 3% of GDP for 20 years, according to the European Stability Mechanism, Reuters said.

Reuters cites a confidential document prepared by ESM which was drafted for last Monday’s Eurogroup discussions between Greece and creditors. The meeting of the euro zone finance ministers was concluded without any agreement on debt easing measures for Greece.

The International Monetary Fund and European institutions continue to disagree on the sustainability of the country’ state debt and fiscal targets of primary surpluses of 3.5% of GDP for an extended period.

A group of euro zone finance ministers, headed by Germany’s Wolfgang Schaeuble, insist that the question of whether Greece needs further debt relief can be decided only after the end of the program, in mid-2018, Reuters says. However, the Fund argues that debt easing is necessary now.

According to the Reuters report, the ESM argues that if Greece can achieve primary surpluses of 3.5% through 2032 and 3% through 2038, no debt relief measures are needed.

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