European official: Greek state's mid-term financing needs 'manageable'; debt not a concern until 2030

By V. Kostoulas
[email protected]

The Greek state's medium-term financing needs are "manageable", even without new debt relief measures, a European official assessed this week, ahead of a crucial June 21 Eurogroup meeting that's expected to be the last ahead of the summer recess.

The same official pointed to far-off 2030 - as fiscal "time" is concerned - as the date whereby Greek state coffers will be start to be pressured by debt servicing. At the same time, the official said sovereign money markets must now be persuaded that the Greek debt is sustainable in the future.

Although the Greek debt stock is huge, servicing costs remain relatively low, with Greece paying less to service its debt than other countries with a lower stock debt. This will change, but not before 2030, the official predicted.

Amid ongoing closed-door deliberations on both sides of the Atlantic regarding possible debt forgiveness being extended in the immediate future - which the IMF has demanded but certain European creditors, especially Germany, consider as still unnecessary - the same source said institutional creditors and Athens are "close" to an agreement regarding the fourth and last review of the ongoing bailout, debt measures as well as post-memorandum supervision.

All of the above are ostensibly on the agenda at the Eurogroup meeting, and up for Eurozone finance ministers' approval.

Moreover, the now ubiquitous "enhanced supervision" of Greek state finances - in the post-memorandum period - was also reiterated, which will be implemented for the first time for a bailed out Eurozone member-state in Greece's case.  

Finally, the same official reiterated that the IMF will participate in "some form" in Greece's post-bailout supervision, adding that ongoing negotiations now focus on the role of the Fund "before the end of the program".