Life in Greece after 2013…..

Everybody decided to go all in long on that Troika deal. With the deal being on/off every 5 minutes, we turn the attention to some figures. It actually doesn’t matter if Greece gets more money or not, they need to restructure/reprofile or whatever you want to call it.

But let us look at the issue in terms of numbers: Even on the off chance that Greece’s primary debt is completely wiped out, in 2012 it will have to pay some 52 billion euros (35 billion in mature bonds and 17 billion in interest), while it is expected to receive 12 billion euros from the troika. In 2013, Greece is not expecting to receive anything from the troika, but it will still need to pay approximately 44 billion euros (27 billion in mature bonds and 17 billion in interest). Basically, it needs to have more than 84 billion euros for the 2012-13 period alone, so even if it receives a loan of 60-65 billion euros, it will still have a shortfall of 20-25 billion. Ostensibly, this amount is supposed to be covered by privatizations and the sell-off of state assets.

Life, however, does not end in 2013. Where will Greece find the tens of billions of euros it need annually to service its massive debt? And what will happen after 2014, when the amount to cover interest rises?

The recipe of spending cuts cannot alone make Greece’s debt sustainable so that it can begin borrowing from the markets. Inclusion in the permanent European mechanism, meanwhile, will merely recycle rather than solve the problem by feeding speculation over Greece’s possible expulsion from the eurozone.

The revival of the Greek economy can be achieved only with a bold reform program and tidying up expenses and revenues, in combination with a major boost in the country’s potential through the exploitation of flagging growth potential on the one hand, and a debt haircut on the other. Figures from Kathimerini.