European institutions voiced “serious concerns” about Greece'sability to repay its debt as Prime Minister Alexis Tsipras preparedfor a renewed showdown with party rebels in parliament to try topass a third bailout.

Greece's obligations will peak at 201 percent of gross domesticproduct next year, before dropping to 160 percent in 2022 under anew rescue program, according to European institution projectionsin a document obtained by Bloomberg. That exceeds the 120 percentlevel sought in the past by the International Monetary Fund (IMF)before putting its own money on the line.

Greek lawmakers are expected to vote on legislation by Fridaymorning that's required to unlock as much as 86 billion euros (US$96 billion) ofaid before a 3.2 billion-euro payment comes due to the EuropeanCentral Bank (ECB) on Aug. 20. The parliamentary action isnecessary to assuage Greece's lenders and would pave the way foreuro-area finance ministers, who meet in Brussels on Friday, tocome to a political agreement on the rescue package.

“I'm carefully optimistic that we'll find a deal and there'll beno need for a default on Aug. 20,” Finnish Finance MinisterAlexander Stubb said in an interview Thursday on BloombergTelevision.

The European Commission's press office didn't respond torequests for comment on the debt analysis.

The Athens Stock Exchange Index fell 0.7 percent on Thursday andis down 27 percent from this year's high in February. The yield onGreece's 2.1 billion euros of 3.375 percent notes due 2017 dropped120 basis points to 13.8 percent. That's down from a 2015 closinghigh of 61.1 percent in July.

Debt sustainability “is one of the most important open issues,”according to a German Finance Ministry checklist of the bailoutterms agreed by the Greek government and creditor delegatesTuesday. Also still to be resolved in Germany's view is whether theIMF will “fully subscribe” to the conditions and whether a plannedprivatization fund can handle bank recapitalization, according to aseparate document obtained by Bloomberg.

IMF regulations bar the fund from lending to countries with “unsustainable” obligations. Innegotiating Greece's second bailout in 2012, the IMF pushed for adebt level of 120 percent of GDP by 2020. It eventually settled for124 percent.

Tsipras Relies on Opposition Support

While the European estimates “point to serious concernsregarding the sustainability of Greece's public debt,” the documentsaid that problem can be solved with a combination of maturityextensions and grace periods for repayment dates, precluding theneed for a nominal haircut.

Tsipras will have to rely on votes from opposition parties toapprove the deal with creditors, as lawmakers from the so-calledLeft Platform of his Syriza party refuse to support continuedausterity. They accuse him of betraying his pledges and the Greekpeople's mandate.

Former Energy Minister Panagiotis Lafazanis, who leads the LeftPlatform, announced the creation of an anti-bailout movement on theIskra.gr website Thursday. Tsipras, whose majority declined by atleast 30 lawmakers during the last two parliamentary votes in July,has scheduled a party congress for September.

–With assistance from Rainer Buergin and Arne Delfs in Berlin,Rebecca Christie in Brussels and Marcus Bensasson in Athens.

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