German Finance Minister Wolfgang Schaeuble said Greece may be allowed to run a higher debt in coming years than envisaged so far as part of the second international aid package for the over-indebted country.
A debt level as high as 123 percent of gross domestic product by 2020 may be permissible instead of 120 percent under the 130 billion-euro ($171 billion) lifeline scheduled for approval at a Feb. 20 meeting of euro region finance ministers, Schaeuble said. Greece’s debt amounted to about 160 percent of GDP last year.
“The 120 percent may be 122 percent or 123 percent,” Schaeuble said at a panel discussion in the southern city of Stuttgart today. “It mustn’t be 130 percent.”
Greece has so far implemented spending cuts and revenue increases that would push its debt to 129 percent of GDP by 2020, the so-called troika of International Monetary Fund, the European Commission and the European Central Bank estimates, according to two people familiar with discussions that involve the troika.
“We need an arrangement that assures in a realistic assumption that Greece will be granted debt sustainability in 2020,” Schaeuble said later in an interview with ZDF public television. “This is only the case if it isn’t much above 120 percent” of GDP.