Euro-zone finance ministers have been meeting to decide whether the Greek government’s down-to-the-wire agreement on reforms will be enough to make the country’s debt sustainable.
Greece’s partners in the euro-zone and the International Monetary Fund have been increasingly frustrated waiting for Athens’ approval of measures they demand in return for a 130 billion euro bailout.
The deal includes a massive write-down plan with private-sector creditors, but analyst Zsolt Darvas, with the Bruguel Institute, said even if investors accept losses of around 70 percent, with the patient so weak, faster would be better.
Darvas said: “If there is a delay with the agreement of the private sector, and for one reason or another there is no agreement on the voluntary debt reduction, then even if there is an agreement with the Troika on 130 billion financing, there will likely be a default by the Greek government.”
Fourteen and a half billion euros in Greek bond obligations comes due for payment on 20 March. The eurozone has until Wednesday to approve the package, but what many see as Athens’ inability to implement policy pledges has not been encouraging.