[BRUSSELS] The European Commission published the assessment it made last week of Greece's request for a bailout, spelling out a different view of Athens' debt sustainability from that taken by the IMF but also signalling a possibility of debt relief.
A day after the IMF published its latest assessment, saying that Greece would require extensive debt relief from its mostly eurozone sovereign creditors, the EU executive's note, published on Wednesday, said the Greek debt-to-GDP ratio would be 165 per cent in 2020 and 150 per cent in 2022 if Greece took action to cut it, but could reach 187 per cent and 176 per cent.
The IMF, which contributed to the Commission assessment, said the debt-to-GDP ratio in 2022 was projected at 170 per cent and called for much greater debt relief than has been proposed.
The Commission's assessment said reprofiling, but no write-offs, of debt was possible, but only if Greece implemented reform measures demanded by its creditors: "The concerns could be addressed through a far-reaching and credible reform programme, very strong ownership of the Greek authorities for such a programme and, after full restoration of the loans agreements, debt-mitigating measures that would be granted only once the commitments to reform from the Greek authorities has been demonstrated.
"A very substantial re-profiling, such as a long extension of maturities of existing and new loans, interest deferral, and financing at AAA rates would allow to cater for these concerns from a gross financing requirements perspective, though they would still leave Greece with very high debt-to-GDP levels for an extended period."