Latest Greece Bailout Could Be Followed by More - Analyst
Published: 22.02.2012 11:36
Kristjan Tamla ( Photo: Postimees/Scanpix )
An analyst for a leading investment house says that the conditions of the latest rescue deal for Greece will probably have to be changed soon, saying the conditions may be unrealistic.
"The only positive side of the new aid package is that likely Greece will be allocated amounts that allow the state to pay back the loan obligations that will fall due in the coming weeks," said Kristjan Tamla of Swedbank's Baltic investment centre.
"It is currently very doubtful whether this will take the state's financial condition to a level where private lenders will once again have confidence in the state," he added.
European leaders agreed early on February 21 on an additional 130 million euros for Greece.
But Tamla stressed that even if all of the country's debt and costs of servicing it were suddenly discharged, the budget would still be short on revenue. "The other side must be achieved through budget cuts and increasing the competitiveness of the economy," said Tamla, adding it was doubtful that the underpinning of the rescue package - debt of 120 percent of GDP by 2020 - would come to pass.
"It shouldn't be forgotten that 120 percent is a high level," he said.
The Estonian government is holding an extraordinary session today to prepare the bill on the European aid package to be sent to parliament, which is expected to sign off on it late this week or early the next.
Kristopher Rikken