The amount of Greek debt is revised upwards and even retroactively.
In application of the new framework of rules, Eurostat requires the inclusion of deferred interest, the amount of which is estimated at around 12 to 12.5 billion euros by the end of last year.
The change is expected to increase the debt-to-GDP ratio by 5-6 percentage points, bringing it closer to 167.5% (from 161.9% now) for fiscal 2023, with a similar impact in subsequent years.
The change is likely to be reflected on October 17, with the release of final GDP estimates and debt figures. There is a possibility that integration could be delayed until March 2024, although registration is considered a given. The main impact will be a worsening of the debt-to-GDP ratio.
Retrospective since 2012
The impact of recording debt interest is essentially limited to the deterioration of the debt/GDP ratio, which will be calculated retroactively from 2012. There is no change at the tax level, since the amounts have been recorded normally in all previous financial years.
This means that there will be a burden on the general government deficit due to this change. Regarding the treasury level (i.e. when the country will start to repay this interest), what is foreseen in the loan agreement with Greece’s creditors (these are loans from the official sector, i.e. the EFSF) is that repayment will start from 2032, at a rate of around €1 to €1.2 billion per year. There will be no impact on the “implemented” target of the new Stability Pact of de-escalating the debt-to-GDP ratio by at least one point for countries with a percentage above 90%. This is because the change is being implemented retroactively from 2012 to 2023.