I've been meaning to write about Greece's fiscal situation for a while, and still intend to publish a comprehensive post on the matter soon.
But since this might be a while, I thought I'd post the forecasts from Greece's hot-off-the-oven Stability plan anyways together with some random, and - in the grand tradition of macroeconomics - not necessarily terribly well thought-through opinions:
1. Thinking mostly about 2011 onwards, I think the growth forecast might be a bit on the conservative side.
2. The unemployment forecast is definitely on the optimistic side; that said, it's worth noting that they have reasonably forecasted unemployment not falling until 2013.
3. Who on earth knows what the deficit or debt are as a percent of GDP. They are OK ball-park figures though, and in any case they are not very relevant at these levels.
4. The probability Greece will be defaulting is extremely low. Buying Greek debt now (if you are willing to hold to maturity) offers juicy returns with very little risk. Btw, this is not investment advice, the value of your portfolio can go up as well as down, you invest your money at your own risk, etc. (isn't there a law that requires me to say this?)
And a question to everyone out there: If Japan - which at the end of the day can always inflate the debt away (yes, they really can!) - comfortably holds debt at 170%-200% of GDP, why can't Greece?