Greek debt relief could mean creditors expect up to 123 billion euros: paper

A Greek flag flies in front of the ancient Parthenon temple atop the Acropolis hill archaeological site in Athens, Greece, June 26, 2015. REUTERS/Marko Djurica/File Photo

BERLIN (Reuters) – A Greek debt relief scenario that postpones interest payments until 2048 would mean that euro zone creditors would postpone the receipt of up to 123 billion euros (138.7 billion dollars), according to a forecast by the German Ministry of Finance.

The ministry’s calculations, which appeared in a letter to an MP seen by Reuters on Friday, considered the various restructuring scenarios presented by the euro zone’s bailout fund, the European Stability Mechanism (ESM).

“With such a deferral of interest, it would de facto be a new loan, the volume of which depends on the evolution of interest rates,” the document states. “The estimated volume of deferred interest until 2048 would be around 118-123 billion euros.”

The Ministry of Finance declined to comment specifically on the document.

The International Monetary Fund (IMF) says it cannot contribute to Greece’s current bailout unless it gets assurances that its debt will be sustainable.

The Fund estimated that the Greek economy would only grow by 1% per year on average and that Greece would return to a primary surplus of 1.5% from 2023 after five years at 3.5%.

Greece needs around €7 billion in loans from its €86 billion bailout to pay off debt maturing in July, but disbursement depends on its lenders’ assessment of its progress. bailout, the conclusion of the so-called second review.

Reporting by Christina Amann and Gernot Heller; Written by Michelle Martin; Editing by Erik Kirschbaum and Helen Popper

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