The Greek Budget Shortfall Gets Bigger

Apparently that Greek shortfall is even bigger than the even bigger figure reported in the German press on Monday.

From Eurointelligence:

Spiegel Online and Suddeutsche Zeitung have updates on the Greek budget gap, which is even bigger than previously assumed – around €30bn. This is the accumulated short-fall the troika is expected to identify in its forthcoming report – the amount Greece has to raise, save, restructure, default on, if it wants to make it through the second loan programme. Spiegel writes that the troika will say that the recession has totally counteracted the budgetary savings, while the government has failed to introduce structural reforms.

Spiegel says this leaves three scenarios: getting the €31bn tranche anyway with more leeway for reforms; a new debt restructuring; or… a forced exit. Which, it says, is not an option, politically.

The troika will also state that Greece will not meet the long-term goals of funding the budget without external help from 2015 and a complete return to financial markets in 2020. Suddeutsche says the EU does not want Greece to fail, but it does not want to pay the €30bn either. There was thus a danger that they would shift the responsibility to the ECB.

From ft.com/alphaville
http://ftalphaville.ft.com/blog/2012/09/25/1175661/the-greek-budget-shortfall-gets-bigger/


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