BRUSSELS Nov 10 Greece will fail to reduce its
debt burden to a manageable level by 2020 with current policies,
European Central Bank policymaker Joerg Asmussen told Belgian
daily De Tijd, forecasting the target set by creditors will be
Greece's second international bailout in March was supposed
to make its debt sustainable by 2020, falling to 116.5 percent
of economic output, but two elections and months of delays in
agreed polices have thrown targets off course.
"Under unchanged policies, the debt in 2020 will still be
somewhat higher than 140 percent of GDP according to ECB
estimates," said Asmussen, a member of the ECB executive board,
in an advance copy of an interview to be published on Saturday.
With total Greek debt estimated at 175 percent of gross
domestic product and forecast to rise to nearly 190 percent next
year, euro zone finance ministers will meet on Monday to try to
determine just how off-track Greece is and how to respond.
Disagreement over the state of Greece's future finances
threatens to further delay the next 31.5 billion euro-tranche of
Greece's second bailout, pushing it close to bankruptcy.
First estimates by inspectors from the European Commission,
the European Central Bank and the International Monetary Fund
show the debt would be at least 130 percent of GDP in 2020. The
IMF differs from the Commission, euro zone officials have told
Reuters, with the Commission more optimistic.
Asmussen told De Tijd that finance ministers had to look at
a range of options to help Greece, "including voluntary debt
buy-back's, lowering the interest rate on outstanding loans and
asking for a higher Greek primary surplus."
A radical strategy would be for euro zone countries, which
have made loans totalling 127 billion euros to Greece under the
two bailout programmes, to write off some of that.
But Asmussen said that was unlikely.
"The appetite for a second restructuring is extremely low
among member states," he said, referring to the private sector
write down of Greek debt earlier this year.
He said it was still better to keep Greece within the euro
zone and that the country may get two more years of financing,
although there was still no agreement on how to do this.
"In the next few days, we need an agreement on further
measures in Greece and additional aid from the other euro area
countries to ensure debt sustainability," he said.