Greece's Debt to Keep Falling Even Under Adverse Scenario: ESM Report

A new report from the European Stability Mechanism (ESM) projects that Greece's public debt will continue to decline over the next decade, even under a severe adverse scenario involving escalating Middle East tensions and rising energy prices.

The ESM's Euro Area Stability Watch report modeled a scenario in which renewed conflict escalation in the Middle East, higher energy prices, and a significant drop in U.S. stocks and bonds would push the eurozone into recession by 2027, with GDP contracting 0.4% that year and inflation nearing 5%.

Under this adverse scenario, public debt would rise across the eurozone by 2035 in every country except Greece and Cyprus, where it would still fall.