The magnitude of Greece’s fiscal challenge was painted in sharp relief yesterday as Athens unveiled new budget projections exceeding the worst-case scenarios envisioned by international lenders when they agreed an €174bn rescue eight months ago.
Instead of Greece’s debt peaking at 167 per cent of economic output next year, as predicted in the March bailout agreement, it will hit 189 per cent and climb to 192 per cent in 2014, according to projections presented to the Greek parliament.
The scale of the problem has put Germany and other eurozone creditors in a quandary, as they could be forced to come up with as much as €30bn in new funding to meet Greece’s needs though 2016 despite strong resistance at home to any new aid. “It’s going to stir debate on Greece’s future funding,” said one Greek official.