European document highlights deep concerns about Greek debt

This means the country would not get its debt pile down to 120pc of GDP – long viewed by the global Monetary Fund (IMF) as the target to get Athens back to a sustainable debt level – until 2030, two decades after the country’s first bail-out.

The Hellenic Statistical Authority in Athens said gross domestic product rose 0.8 percent, as it revised up its estimate for the first quarter to show stagnation.

“The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt”, said the analysis, adding that far-reaching reforms were needed to address the worries.

Greece’s ruling Syriza party is edging towards a formal split this afternoon, hours before rebel leftist politicians plan to vote against a new bailout deal to keep the country afloat.

The unexpected boost for Prime Minister Alexis Tsipras comes as Greece’s parliament meets in emergency session on Thursday to ratify a new bailout deal, although it is unclear whether the multibillion-euro agreement had the vital backing of Germany.

Germany, the major eurozone economy and another Greek creditor, has “questions” about the planned deal.

A spokesman for the German government described a deal on Friday as a “desirable but not foregone conclusion”.

A new assessment says there are serious concerns about the sustainability of Greek government debt and that it will require mitigating measures-a step many eurozone governments have been reluctant to take.

The Greek economy emerged from a six-year recession in 2014 but shrank again in the final quarter as political upheaval returned. “Things are looking much better right now”.

Official data showed the economy grew by 0.8pc in the three months to June. “Indeed, we think it is more likely that growth in the region as a whole will slow further in the second half of the year”, she warned in a research note on Friday.