Greece. report. 10/21/2011

Report from the International Monetary Fund (IMF), European Central Bank (ECB) and European Commission.

Interne Begutachtung der Situation in Griechenland durch Internationalen Währungsfonds (IWF),  Europäische Zentralbank (EZB) und Europäische Kommission.

Recent developments call for a reassessment of the assumptions used for the debt
sustainability analysis.

To give the debt sustainability analysis a firmer foundation, the following set of
more likely policy and macroeconomic outcomes has been assumed

A slower recovery.

Lower privatization proceeds.

Reduced fiscal adjustment needs.

Delayed access to market financing.

Under these assumptions, Greece’s debt peaks at very high levels and would
decline at a very slow rate pointing to the need for further debt relief to ensure

Stress tests to this revised baseline illuminate further the problem with
sustainability, revealing that the downward debt trajectory would not be robust to
•  All else unchanged, significant shortfalls relative to the revised fiscal and
privatization targets would deteriorate debt dynamics even further:

Lower primary balances.

Shortfalls with privatization receipts.

Permanent growth and interest rates shocks can lead to unsustainable debt

A combined shock—to represent a scenario of strong internal devaluation
enforced by a much deeper recession—would sharply raise debt in the near-

Greece is assumed to return
to the market at spreads falling from 500 bps to 250 bps by 2020


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