New restructuring of Greek debt ‘unavoidable’, German FinMin advisor tells Sunday paper

“In my opinion, the restructuring of the Greek debt is unavoidable,” he said, as “the running level of the debt is very high and will continue to rise, despite the progress Greece has achieved in its primary surplus, that is, its state budget, without interest payments,” Rocholl explained.

However,

he added, “even with a significant ‘haircut’, of, for example, half its debt, Greece must improve its primary surplus in order to be in a position to shoulder the level of its debt after a restructuring.”

Although Greece has “undoubtedly experienced serious austerity measures,” the economist said, “infrastructural reforms are more necessary than ever … and must include the improvement of the taxation system so that (financially) stronger taxpayers can contribute more to the balancing of state budgets.”

Rocholl, a professor at the European School of Management and Technology in Berlin, said that the original target of 50 billion euros revenues from privatisations “is certainly not realistic at this point” and referred to an International Monetary Fund (IMF) observation in 2011 that the Greek state had significant real estate assets it could use to reduce public debt. “But, here, again, more must be done to improve the legal and institutional framework for possible investors,” he pointed out.

Source: AMNA