“Fitch believes that general government debt sustainability will improve, underpinned by sustained GDP growth, reduced political risks, a track record of general government primary surpluses and additional fiscal measures legislated to take effect through 2020,” said the ratings agency in a note out earlier this month. “Expectations of a smooth completion of the third review of Greece’s ESM programme reduce risks that the economic recovery will be undermined by a hit to confidence or by the government building up arrears with the private sector.”

Expectations for Eurozone creditors will treat Greek debt are also important to the 2018 case for GREK.

“We expect the Eurogroup to grant further debt relief to Greece this year. The set of debt relief measures will aim to keep gross financing needs below 15% of GDP in the medium term and below 20% of GDP thereafter, as stated in the 15 June 2017 Eurogroup statement. This is set to improve public debt sustainability over the long term and should support market confidence, which will help underpin post-programme market access,” according to Fitch.

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