The German newspaper Handelsblatt on the drastic reduction of the Greek debt
“It was the most expensive rescue in international economic history. With credits of 289 billion euros, the Eurozone and the International Monetary Fund saved Greece from bankruptcy in the period 2010 – 2018. As a result, Greece is currently shouldering the highest debt of any other EU country”, writes the Handelsblatt newspaper under the title “The Greek debt on a shrinking trajectory’.
The financial newspaper observes in response from Athens: “Greece is back on its feet financially so that Finance Minister Kostis Hatzidakis is able to repay debts earlier than the schedule provides. In the coming weeks, approximately 2.6 billion euros will be transferred to Eurozone countries. The money for the early repayment of the loans comes from increased tax revenues. In the first eight months of 2023, the revenues of the Greek state were 3.2 billion euros above expectations. Furthermore, Greece has a cash reserve of around 35 billion euros.
Not only thanks to early repayments, but mainly due to strong economic growth, Greece has managed to significantly reduce the ratio of debt to GDP over the last three years. Greek GDP grew by 8.4% in 2021 and by an additional 5.9% in 2022. For the current year, Athens predicts an increase of 2.3%, while in 2024 it expects growth of 3%. Correspondingly, the debt ratio decreased from 206.3% in the year of the pandemic 2020 and to 171.3% at the end of 2022. By the end of 2023 the debt is expected to be reduced to 162.6%.
The most important condition for continuing the reduction of the Greek debt is, apart from economic growth, fiscal discipline. The goal is until 2026, the debt-to-GDP ratio to fall to 135.2%. If this is achieved, Greece will hand over the baton of the champion country, in terms of the highest public debt in Europe, in Italywhich, based on its own fiscal stability program, will have debt in 2026 at 140.4%”.
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