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Greek debt expected to fall by 2020

03-14-2012 08:11 BJT

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New figures show the level of Greece's national debt is expected to fall below 120 percent of GDP in 2020 -- that's down from 160 percent this year. The forecast comes on the back of the recent debt swap deal and the promise of a new bailout by the EU and IMF.

The ratings agency ’Fitch" has also upgraded Greece from its "restricted default" status. But analysts fear it’s not enough and Greece may yet need a third bailout while several other eurozone countries still run the risk of following Greece into a debt crisis.

Greece may have finally been granted its second bailout - but that hasn’t stopped the protests in Athens.

These government workers have taken over a ministry building to demonstrate against the shutting down of state organizations, which will lead to more job losses.

Eurozone finance ministers gave the final approval to the new rescue package during a meeting in Brussels.

Greece’s Evangelos Venizelos said he was pleased by the decision, which should fund Greece until 2014.

Greece Finance Minister Evangelos Venizelos said: "The successful story of the Greek PSI was a great satisfaction not only for me, as the Greek minister of finance, but also for the eurogroup, because the PSI is the result of joined effort, not only from the part of the Greek government, but also from the part of our institutional partners."

Greece’s international lenders, Europe, the International Monetary Fund and the European Central Bank believe the latest 130 billion euro package, combined with debt restructuring and reforms can make Greece’s debt more sustainable.

But some analysts are already saying Greece might need a third bailout in the future.

Chris Scicluna from Daiwa Capital Markets agrees.

Chris Scicluna said: "The new bailout package demands huge amounts of additional adjustment from Greece, pretty much the same reduction in the primary fiscal balance over the coming three years that we’ve seen over the past three years. It also requires Greece to start raising massive proceeds from privatization, some 15 billion euros of receipts over the next three years, the same again or more over the subsequent three years, at the same time as we know that the economy continues to contract."

The markets didn’t really react to the Greek news

It seems investors are already looking at the next source of worry in the eurozone - Spain.

Robert Halver is from Baader Bank.

Robert Halver said: "We’ve got a new problem child in euro land: Spain. Spain should do its homework, especially economic reforms. Spain has to deregulate its absolutely inflexible job market."

Madrid recently announced the previous government had significantly missed its 2011 budget deficit target.

And the new administration said despite its best efforts it won’t be able to meet the EU’s agreed deficit for this year either.

Spain is a far bigger economy than Greece. It’s avoided a bailout so far, and the euro zone wants to make sure it stays that way.



Editor:Zhang Rui |Source: CNTV.CN

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