The analysis, prepared by the European Commission, the European Central Bank and the International Monetary Fund for euro zone finance ministers and obtained exclusively by Reuters, shows that after the debt swap at the weekend, Greek debt could fall to 116.5 percent of GDP in 2020 and 88 percent in 2030.

"Results show that the program can place Greek debt on a sustainable trajectory," said the analysis, marked strictly confidential. However, it also warned that the debt trajectory was extremely sensitive and the program was "accident prone".

It said the restructuring of privately held Greek bonds would help to initially reduce debt, but that debt would spike up again to 164 percent of GDP in 2013 due to the shrinking economy and incomplete fiscal adjustment.

"Once the fiscal adjustment is complete, growth has been restored, and privatization receipts are accruing, steady reductions of the debt ratio commence. Greece would have to maintain good policies through 2030 to reduce the ratio below 100 percent of GDP," the report said.

The euro zone may also have to be prepared to lend even more money to Athens, the report said.

It said that when Greece tries to return to markets after 2014, it would first have to issue short-term debt and still pay high interest rates because its debt ratio would still be high, it would have senior debt to pay back first and it would need to establish a considerable track record with the market.

"This would initially discourage large issuances and imply continued reliance on official financing, as committed by Euro area member states on standard EFSF borrowing terms, provided Greece successfully implements its program," the report said.

LOTS OF RISKS

The road to sustainable debt will be long and fraught with risks, the authors said, underlining the delicate balance Greek politicians are going to have to make in the coming decades.

"The Greek authorities may not be able to implement reforms at the pace envisioned in the baseline," it said.

"Greater wage flexibility may in practice be resisted by economic agents; product and service market liberalization may continue to be plagued by strong opposition from vested interests; and business environment reforms may also remain bogged down in bureaucratic delays," it said.

It may take Greece much more time than assumed to identify and implement the necessary structural and fiscal reforms to improve the primary balance from -1 percent in 2012 to the required 4.5 percent of GDP, it said.

"Concerning assets sales, delays may arise due to market-related constraints, encumbrances on assets, or political hurdles. And of course a less favorable macro outcome would itself further hurt policy implementation prospects," it said.

In the less favorable scenario, the debt ratio would peak at 170 percent of GDP in 2014. Once growth recovers, fiscal policy achieves its target and privatization picks up, debt would begin to slowly decline. Debt to GDP would fall to around 145.5 percent of GDP by 2020.

The analysis forecasts that after another year of recession this year, the Greek economy will stabilize in 2013 and see a mild recovery in 2014-2017 and then growth at its potential rate of 2.5 percent annually.

Athens is expected to generate a primary surplus of 4.5 percent in 2014 from a 1 percent deficit this year -- a crucial factor because if the primary surplus is stuck below 1.5 percent of GDP, Greek debt would be on an ever increasing path.

Greece is expected to obtain 45 billion euros from privatization until 2020, although it is likely to get only 12 billion by 2014, the report said. If it gets on 10 billion euros by 2020, the debt ratio in that year would be 130 percent.

(Reporting by Jan Strupczewski; editing by Rex Merrifield)

• A Permanent Economic Emergency