Greece will be unable to pay back its debts to international creditors by 2020 according to the so-called troika of international lenders, German daily Handelsblatt reported on Monday, quoting unnamed sources.
The troika consists of the European Commission, European Central Bank and International Monetary Fund.
The existing financial rescue package for Greece includes a 130 billion euro rescue loan, of which 73 billion has already been disbursed, with the rest due to be handed over by 2014.
Greece’s creditors hope it will be able to stand on its own feet regarding debt repayments by that date, including long-term and medium-term bond payments. Greece lost access to the long-term finance market when it went into recession and needed to resort to EU and IMF loans to meet its outstanding debt repayments.
In autumn 2010 Athens was granted a 110 billion euro rescue package until 2013. Creditors hoped that this would enable Greece to make a gradual return to market financing by 2012, but the rapid collapse of the country’s credit rating and its economic turmoil and loss of lender confidence prevented this. The troika was then forced to step in with a second loan package in spring 2012.
The troika said earlier this year that Greece must maintain its austerity drive of privatization, spending cuts and tax increases in order to boost government revenues, in order to get its outstanding rescue package funds. Greece has appealed for more time to implement austerity measures but has been rebuffed by Germany’s Chancellor Angela Merkel.