From barter to martyr

3 July 2015 By Neil Unmack Follow @unmack1

European creditors are wary of writing off Athens’ debts because it could set a precedent. Yet if Prime Minister Alexis Tsipras resigns after the referendum, a deal should be doable. Few politicians would follow his path of capital controls, economic strife and career implosion.

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Greek debt may need to be written down if it is to be deemed sustainable, the International Monetary Fund wrote in a report published July 2. A haircut would be needed if Greece grows by 1 percent a year, and maintains a primary surplus of 2.5 percent of GDP. It may not need a haircut if it grows faster or maintains a higher primary surplus, but would still need debt extensions and interest rate holidays, the IMF wrote.

Greece will hold a referendum on whether to accept the terms of its bailout agreement on July 5.

Yanis Varoufakis, Greece’s finance minister said on July 2 he would not continue in his post if the country votes to approve the deal, Bloomberg said, quoting Varoufakis. Alexis Tsipras, Greece’s prime minister hinted in a speech on June 30 he would also resign if the vote goes against him.

Greek debt will reach 182 percent of GDP in 2015 Barclays estimated in a report published June 25.

Context News

Greece will hold a referendum on whether to accept the terms of its bailout agreement on July 5.

Greek debt will reach 182 percent of GDP in 2015 Barclays estimated in a report published June 25.

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