Greece’s international creditors no longer believe Athens can achieve its financial objectives, especially a reduction in its debt burden, the German business newspaper Handelsblatt reported.
“Until now, creditors worked on the principle that Greece would achieve a sustainable level of indebtedness by 2020. This goal is no longer achievable,” the newspaper said, citing sources close to the so-called troika of creditors — the International Monetary Fund, the European Union and the European Central Bank.
The conditions agreed to by Greece under a second credit lifeline of 130 billion euros ($170 billion) are therefore obsolete, the newspaper added.
Creditors had envisioned Greece’s debt ratio would reach 120.5 percent of gross domestic product by 2020, compared with the 161-percent level it is expected to hit this year.
But the 120.5-percent level would only be reachable if Athens showed a primary surplus (outside of debt payments) of 4.5 percent of GDP by 2014. The newspaper said this would not be the case until 2016.
Greece is currently negotiating with the eurozone for a more time to implement reforms and achieve its objectives.