A restructuring of Greece’s sovereign debt is unlikely to be considered until late 2011 – giving the country a chance to prove it is worthy of support, says Anke Richter, executive director of credit research at Conduit Capital Markets.

“Greece will certainly make progress on its fiscal consolidation, although we are less sure it will achieve its targets,” she says. Indeed, Ms Richter is not convinced the European Union and International Monetary Fund believe the package will lead to Greek debt sustainability.

“Instead, we think they will view it as a trial period for Greece to show it is ‘worth’ supporting,” she says. “We believe Greece will receive further support if it has shown its ‘worthiness’.”

Such support could take various forms and is based on the assumption that, having shown fiscal restraint, deleveraging is possible, but will need more time, she says. “There is great willingness in the EU to give this a try, given that the alternatives are hardly cost- and pain-free.

“A restructuring in 2012 will only be considered if fiscal progress has been absolutely hopeless. In such a case, a ‘haircut’ of between 40 and 50 per cent would probably be needed, along with a potential exit from the eurozone.

“Equally, should Greece fail even after showing its ‘worthiness’, restructuring will be back on the agenda. But uncertainty will remain high well into late 2011.”

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