The increasingly outspoken Parliament Budget Office, an independent entity under the legislature’s jurisdiction, on Wednesday again reiterated the need for a “serious restructuring of Greece’s debt”.
Moreover, the Budget Office, in a fifth interim report entitled “The Debt’s Trap”, also said the restructuring should be accompanied by the implementation of “crucial reforms”.
In language reminiscent of the IMF’s strict technocratic approach, the report states that crisis-bedeviled Greece is ensnared in a recessionary spiral due to high debt and economic uncertainty.
“The current situation, namely, a continuous turnover of loans with new loans, leads to an impasse, both for Greece, as well as for creditors,” the report state.
Restructuring the debt in order to jolt the country back into an orbit of growth will also benefit creditors, the report stated.
The Budget Office went even further – than most European creditors, for instance – in recommending that debt restructuring render Greece capable of servicing its remaining debt via market lending.
Conversely, the report cautions, that restructuring without “deep reforms” will not help, as the country will again find itself “on the edge” in a few years.
