The arithmetics of the November 26th Eurogroup (November 30, 2012)
The arithmetics of the November 26th Eurogroup (November 30, 2012)
Greece Focus Notes
30 Νοεμβρίου 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.
