It is no secret that the programme is subject to exceptionally high implementation risks. The debt exchange operation has been successful, official financing has been scaled up. This has improved debt sustainability prospects: the estimated debt-to-GDP ratio could be brought to about 116½% in 2020. But this all depends on one key condition, namely that Greece fully implements the programme.
Debt dynamics are extremely sensitive to implementation slippages. Delayed fiscal consolidation, lower privatisation proceeds or slower structural reforms: such scenarios would translate into weaker economic growth and worsen again debt sustainability. Without a regime-change in policy implementation and a much broader political consensus in favour of painful, but necessary reforms, there is a high risk that the programme derails.