Greek is Going to Fall Apart

By : Lie | 01 Nov 2012, 18:47 | A A A

(Vibiznews-Forex) Greece’s debt-load is rising much faster than expected as the country spirals into a sixth year of depression, ratcheting up the pressure on Germany and Europe’s creditor states to accept debt-forgiveness for the first time..
Finance minister Yannis Stournaras said public debt will reach 189pc of GDP, far higher than estimates of 179pc published just weeks ago.
The new estimates exceed the worst-case scenario sketched by the International Monetary Fund and demolish any hope that Greece can claw its way back to solvency. "Unless EU leaders come up with a sustainable solution and cut the debt burden, everything is going to fall apart in Greece," said Simon Derrick from BNY Mellon.
The Greek economy is still caught in a vicious circle. It will contract by further 4.5pc next year, while the budget deficit will remain stuck at 5.2pc, according to forecasts in the 2013 budget.
The EU-IMF Troika is expected to give Greece an extra two years until 2016 to meet budget targets but the issue has already been overtaken by events.
The IMF now fears that the debt will still be 150pc of GDP in 2020. It has already stated that it cannot take part in any further aid packages unless the debt in on track to fall below 120pc. (Ferli/RF/VBN)