August 1, 2018 / 5:28 PM / a year ago

EU Commission says stands by Greek debt sustainability assessment

BRUSSELS (Reuters) - The European Commission defended on Wednesday the euro zone’s debt relief measures for Greece even though the International Monetary Fund said on Tuesday the debt relief might not suffice to make Greek debt sustainable the long-term.

Commission spokeswoman Mina Andreeva told a regular news briefing that the IMF’s forecasts for Greece have been “consistently pessimistic” and that the Fund had to revise them in the past.

“The European Commission, the European Stability Mechanism and the European Central Bank have made their assessment and we as Europeans finance the programme and our conclusion is that the debt relief for Greece is sufficient,” she said.

“But we have also said that we will look at this again in 2032,” she said.

In June, euro zone finance ministers extended maturities and deferred interest of a major part of their loans to Greece along with a big cash injection to ensure Athens can stand on its own feet after it exits its bailout on Aug 20.

But the IMF said on Tuesday that while the euro zone debt relief has made its huge public debt sustainable over the medium term, optimistic European assumptions on Greek growth and primary surplus well into the future made debt sustainability uncertain in the long-term, especially after 2038.

Greece has been living primarily on money borrowed from euro zone governments in three bailouts since 2010, when it lost market access because of a ballooning budget deficit, huge public debt and an inefficient economy and welfare system.

Reporting By Jan Strupczewski

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