European officials should accept that Greece may never repay its $366 billion debt, analysts told CNBC, even if the troubled economy secures a bailout extension.
Greek debt is not repayable in this life, Kingsley Jones, founder and CIO of Jevons Global, told CNBC on Monday: "We have to be realistic here. Greek debt is now 175 percent of gross domestic product (GDP); it's higher than it was when this whole business first started."
"Just look at Japan. It has government debt rapidly approaching 300 percent of GDP. One day, that debt pile simply implodes. It is not ever going to be repaid, nor will the Greek debt. There is no use standing on the high moral ground," Jones said.
Athens' current bailout program with European creditors requires Greece to reduce its debt to below 110 percent of GDP by 2022. The program was extended for another four months in a last-minute deal on Friday, failing to meet ruling party Syriza's request for an official haircut, or reduction, on outstanding debt – a promise that brought the leftist party to power last year. However, final confirmation of Friday's bailout extension hinges on the list of reforms Prime Minister Alexis Tsipras submits on Monday.
"The terms of the current agreement pretty much require Greece to attempt to run a primary budget surplus over 4 percent for well over a decade...No country with an unhealthy economy has ever managed to do that. So, we think that the current terms that are required of Greece are frankly pretty unrealistic," Jones added.