Growth needed, not surpluses

Achieving higher growth would be nearly twice as effective when it comes to reducing Greece's debt as relying on very high budget primary surpluses, according to a study released on Thursday by credit rating agency Scope Ratings. 

Scope "tested the sensitivity of Greece's debt-to-GDP burden under [International Monetary Fund] forecasts using different assumptions regarding real growth rates and primary surpluses, all other factors being equal. A 1 percent higher growth rate over the next six years would result in a further reduction in public debt of around 11 percentage points of GDP by 2024... By contrast, an extra one percentage point higher primary surplus-to-GDP would result in an additional debt reduction of only 6 percentage points of GDP," the analysis says. 

While adhering to the spending targets helps boost investor confidence, it could also have adverse...