ESM: Greece won't need debt relief if it keeps its surplus above 3%/GDP for 20 years - Reuters


According to a confidential paper prepared by the European Stability Mechanism, obtained by Reuters, Greece will not need any debt relief from euro zone governments if it keeps its primary surplus above 3 percent of GDP for 20 years.

Key highlights (via Reuters):

  • Greece would have to keep primary surplus of around 2 pct/GDP until mid-2030s if maximum debt relief offered
  • Maximum debt relief under consideration is extension of avg weighted maturities by 17.5 yrs from current 32.5 yrs
  • Maximum debt relief would also cap interest on loans at 1 pct until 2050, limit loan repayments at 0.4 pct of greek GDP
  • Maximum debt relief would also entail euro zone buying back some 13 bln euros worth of IMF loans to Greece
  • Under IMF assumptions of future Greek growth, primary surplus, even maximum euro zone debt relief offer is not enough -paper
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