Press reports and sources from Brussels this week mostly converged on the fact that a soon-to-be released debt sustainability analysis (DSA) by the EU Commission on the Greek debt will directly recommend additional debt relief measures.
Composition of the report, which will detail the Commission's positions on the issue, reportedly commenced after last week's Eurogroup agreement, which first approved a pending loan tranche to bailout-dependent Greece but also listed the next steps in terms of debt and fiscal targets for the country.
One of the most prominent points in a Bloomberg report on Tuesday regarding the still unpublished report is that the Commission's best-case scenario includes a forecast of annual servicing of the Greek debt exceeding 20 percent of GDP, and despite the fact that the scenario is based on a positive assumption of annual Greek GDP growth of 3 to 4 percent until far-off 2060.
The same information purportedly shows that the Commission's DSA calculates that Greece's annual debt servicing costs will drop to 9.3 percent of GDP in 2020, down from 17.5 percent this year. However, the figure is forecast to exceed 20 percent by 2045, even under the "positive scenario".
The prospect is the reason that the Commission report will recommend additional debt relief measures, such as the oft-cited extension of loan maturities and longer grace periods for repayment.
