According to an analysis completed by the European commission, the European Central Bank and the eurozone bailout fund, Greece’s debts will peak at 201% of its national output (GDP) in 2016.
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The Hellenic Statistical Authority in Athens said gross domestic product rose 0.8 percent, as it revised up its estimate for the first quarter to show stagnation.
“The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt“, said the analysis, adding that far-reaching reforms were needed to address the worries. The measures include increases in the retirement age, opening up the energy and pharmaceutical industries and new taxes on shipping firms.
The vote, expected in the early hours of tomorrow, will test the strength of a rebellion by anti-austerity Syriza politicians, which could raise pressure on Prime Minister Alexis Tsipras to call snap elections as early as September.
Germany, the major eurozone economy and another Greek creditor, has “questions” about the planned deal.
However, an agreement was expected to be passed, with support from the opposition, paving the way for eurozone finance ministers to ratify a deal in an emergency meeting this afternoon.
A spokesman for the German government described a deal on Friday as a “desirable but not foregone conclusion”.
“While Greece appears finally to be on the verge of receiving a third bailout, the extremely optimistic economic and fiscal projections underlying the plan suggest that it might not last for very long”, he said.
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As per the assessment document, due to the deterioration the Greek economy, which the Institutions expect to shrink by 2.3% in 2015 and by 1.3% 2016, there are now “serious concerns” about whether Greece will be able to pay back its debts. The path towards recovery has started. In addition, they would have to proceed with a re-profiling of the Greek debt through an extension of maturities of bailout loans and interests.
