€317 billion ($453 billion) . Over 175pc of national output. That's the enormous debt mountain that faces the new Greek government. It is the issue over which the country is set to clash with other countries in the eurozone.
As it stands, Greece's debt-to-GDP ratio is the highest in the currency bloc. It has been steadily rising as the country has undergone painful austerity and experienced a severe contraction in economic output.
The new far-left/right-wing coalition is now demanding a write-off of up to 50pc of its liabilities. The government argues that this is the only way Greece can remain in the single currency and prosper.
According to the newly appointed finance minister, who first coined the term "fiscal waterboarding" to describe Greece's plight, the EU has loaded "the largest loan in human history on the weakest of shoulders - the Greek taxpayer".
So far, the rest of the eurozone is adamant that it will not meet demands for debt forgiveness.
And yet, the value of Greece's debt mountain has been called a meaningless "accounting fiction" by Nobel laureate Paul Krugman.
So what does Greece's €317bn debt really mean for the country and its creditors? And can it ever be paid back?
Myth 1: They can never pay it back. Ever.
Never say never. On the issue of repaying back its liabilities, it's more a question of time, rather than money.
Greece has already been the beneficiary of a number of debt extensions, and in 2012, underwent the biggest private sector debt restructuring in history.
The average maturity on Greek government debt currently stands at 16.5 years. The sustainability, or otherwise, of the country's burden relies more on the timetable for repayment rather than the overall stock of the debt, argue many economists.
Myth 2: Greece is paying punitive interest rates
Not really. Greece has managed to negotiate favourable terms on which it can service the cost of its loans and the interest paid by the country is far below that of Spain, Ireland, and Portugal
Think-tank Bruegel calculates that Greece paid a sum equal to around 2.6pc of its GDP (rather than the widely quoted figure of around 4pc) to service its loans last year.
This is because Greece will actually receive back the interest it pays to the ECB should it continue to meet its bail-out conditions.
Even without a further renegotiation on interest payments, the costs could be even lower this year. In the words of economist Zolst Darvas from Bruegel:
Given that interest rates have fallen significantly from 2014, actual interest expenditures of Greece will be likely below 2pc of GDP in 2015, if Greece will meet the conditions of the bail-out programme.
It is this combination of such long maturities and rock-bottom interest rates, that has led at least one former ECB governing board member to argue that Greece's debt burden is far more sustainable than many of its southern neighbours.
Myth 3: "Greece won't recover without debt forgiveness"
Wrong again. For all the fixation on the outstanding stock of Greek debt, kickstarting growth in the country is more likely to happen through a relaxation of budget rules rather than a debt cancellation.
With the coffers looking sparse, the Syriza-led government is also asking for a renegotiation of the surplus rules imposed on the country.
Greece is currently required to run a primary surplus of 4.5pc of its GDP. Before taking account of its debt interest payments, it is likely to achieve a primary budget surplus of around 3pc of its national output this year.
This severely limits the new government's room for fiscal manoeuvre. It also makes it almost impossible for Syriza to fulfil its pre-election promises to raise the minimum wage and create public sector jobs.
According to calculations from Paul Krugman:
Dropping the requirement that Greece run a primary surplus of 4.5pc of GDP would allow spending to rise by 9pc of GDP, and that this would raise GDP by 12pc relative to what it would have been otherwise. Unemployment would fall by around 10pc relative to no relief.
None of this is to deny that Greece would hugely benefit from a significant debt cancellation. But the politics of the eurozone means that this is virtually impossible.
However, there do seem to be other ways that Greece could start tackling its enormous debt mountain.
Telegraph, London
