Tuesday, November 27, 2012

Greek Debt Deal Explained

by Matina Stevis

Wall Street Journal

November 27, 2012

Disclaimer: this headline is meant to make you click on it but the blog-post may not deliver all it promises. The reason is that, after dozens of hours of tough negotiations by finance ministers that finished early on Tuesday, the hotly-anticipated deal to cut Greece’s debt and give the country the aid it’s been waiting for since June is as clear as mud.

Here we take you through what we do know and highlight what we don’t, especially in view of the latest numbers crunched by debt experts from the troika of the European Commission, the European Central Bank and the International Monetary Fund, that our Gabriele Steinhauser got her hands on later on Tuesday.

The agreed goal is to bring Greece’s debt down to 124% of its economic output in 2020 and “substantially below” 110% in 2022. An exhausted press corps in Brussels was handed out a vague statement at 2 am CET Tuesday morning that left the impression that the measures agreed by finance ministers would lead to Greece meeting those targets.

However, the numbers that emerged later on Tuesday show that the measures announced immediately after the meeting will get Greece’s debt down only to 126.6% of Gross Domestic Program in 2020 and 115% in 2022.


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