The arithmetics of the November 26th Eurogroup (November 30, 2012) | Eurobank
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The arithmetics of the November 26th Eurogroup (November 30, 2012)

On November 26, euro area finance ministers and the IMF managed to bridge their differences and reach an agreement on a series of strategies to repair Greece’s sovereign liquidity and solvency outlook. The deal aims to reduce the country’s public debt-to-GDP ratio to 124% by FY-2020 and to sub-110% levels by FY-2022. Under certain conditions, the endorsement of new debt relief strategies for Greece opens the way for the release of new official funding to the tune of €43.7bn by the end of Q1 2013. In this note, we summarize the main elements of the November 26 Eurogroup agreement and provide a preliminary assessment of its potential implications for the evolution of the public debt to GDP ratio as well as the general government borrowing needs and sources of funding.