Official: Troika Assumes 2-Year Extension of Greek Program

Published November 09, 2012

| Reuters

All analysis made by international lenders of Greece's fiscal adjustment path are done on the assumption that Athens will have two extra years to reach its primary surplus target, but there is no official decision yet, a senior EU official said.

"There is no decision on anything yet, but I have reason to believe that the troika (of lenders) has been producing all of its reports and fiscal analyses and adjustment paths on the basis of an additional two years to reach a primary surplus of 4.5 percent of GDP," the official said on Friday.

Greece was to reach such a primary surplus, which would allow it to stabilize its debt, originally in 2014, but now that deadline is likely to be moved to 2016.

The official said the extra time would require new financing from the euro zone, but did not give any specific figures. Other officials earlier estimated the additional financing needs at 30 billion euros.

He also noted that even though euro zone finance ministers were unlikely to make a final decision on unfreezing emergency loans to Greece on Monday, Athens would not default, by accident or otherwise, on the treasury bill redemption due on November 16.

URL

http://www.foxbusiness.com/markets/2012/11/09/official-troika-assumes-2-year-extension-greek-program/