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EU Commission believes additional measures needed for Greece to make debt sustainable

The European Commission believes that additional measures will be needed to make Greece’s debt sustainable, European Commission’s lenders’ mission chief for Greece, Declan Costello, said on Sunday in the  Economic Forum held in Delphi. He said he was confident the final review of the country’s bailout will be wrapped up by May or June at the latest, but new measures will be needed in order to make Greek debt sustainable. He did not mentioned at all the possibility of  debt relief.

The real question, Costello said, is whether Greece will be able to achieve a sustainable economic rebound in the middle to long term, given the multiple challenges of continued high rates of public debt, unemployment and nonperforming loans.

In terms of reforms, Costello said that while Greece has made significant progress in legislating structural reforms, it still has a long way to go in terms of implementation and may need continued supervision in this respect.

According to Declan Costello, the latest compliance report, prepared by the European Commission, as part of the third programme review, reviews the estimates for the sustainability of the Greek debt and confirms that additional relief measures should be taken.

However, European Stability Mechanism (ESM) head Klaus Regling had earlier left open the possibility of a Greek debt relief, but he stressed that this is not a priority right now.

Stressing the importance of growth and the continuation of reforms, Regling said “Greece has come a long way to recovering from the 2009 crisis and to remedy the imbalances that this crisis has triggered. If everything goes well, it will soon no longer need financial assistance” from its eurozone partners.

However, the journey is not over – we are far from this. Making Greece a modern, competitive and sustainable economy will take longer and last long after the end of the ESM program (expected in August). This is my most important message today,” he said.

According to Regling, “while everyone agrees that Greek debt should be manageable, “its further relief is not the most important thing needed in order to achieve this. What Greece needs first and foremost is growth, ongoing reforms and a business-friendly economy with sufficient public administration.”

Greek debt? Not sustainable? No dept relief? Additional measures? See this!

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