According to a preliminary report compiled by the International Monetary Fund Greece will miss its fiscal targets by quite a significant amount.
Excerpts of the report, which were given to the Eurogroup Working Group, revealed that by 2020 Greek debt will be above the target of 120 per cent of GDP.
An official who chose to remain anonymous was quoted as saying: ‘It is clear that Greece is off track and there is no chance they will cut the debt to 120 per cent of GDP in 2020 as envisaged. It will be rather 136 per cent, and this would be under a positive scenario of a primary budget surplus, a return to economic growth, and privatisation. New prior actions will be needed, on top of the existing 89 [reforms]. Additional financing needs for Greece are now seen at around 30 billion Euros.’
A variety of official sources have made their own projections over the past few weeks with estimates running from 13 billion to 30 billion.
With the Eurozone’s largest economy against providing Greece with any further aid just where this additional funding would come from is a major concern.
The unnamed official added: ‘The IMF is pushing for OSI (Official Sector Involvement) in Greece, Germany is strictly against. And they are not the only ones.’
Finland and the Netherlands are also against supplying Greece with money from the 17-nation currency bloc’s permanent bailout fund, the European Stability Mechanism.
But one thing is becoming clear, if Greece is to survive the debt crisis a lot of funding is going to have to come from somewhere pretty soon.
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