The European institutions overseeing Greece’s bailout have expressed “serious concerns” over the sustainability of the country’s debt, bringing them into line with the more pessimistic assessment of the International Monetary Fund.
The European Commission and the European Central Bank argue in a new analysis that debt relief measures, including extending repayment periods, would allow Athens to achieve debt sustainability, a solution advocated by the IMF. They say such moves would avoid the need for a full-scale haircut.
The conclusion provides a boost to Greek prime minister Alexis Tsipras on the day he seeks to push a highly contentious reform and austerity programme through parliament as part of a new €85bn rescue programme agreed in outline on Tuesday. It will heap pressure on Berlin to back substantial debt relief for Athens when Greece’s creditors discuss the issue in the autumn.