Thanks to the private sector involvement Greek government debt in relation to gross domestic product (GDP) is likely to fall by close to 10 percentage points this year to around 156%. Without the haircut the debt ratio, which has risen steeply of late, would have reached a good 180% at the end of 2012, compared with around 129% at the end of 2009. However, this means that the debt reduction does not fully match the scope of the haircut (EUR 107bn) because some EUR 50bn of the second aid package alone is likely to be needed for the recapitalization of Greek banks and to offset the losses recorded by Greek pension funds.