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by jacquesm 3998 days ago
This is all true now, but it wasn't when this whole circus started.

As for the present my personal preference would be to simply forgive all debt and to ask Greece (politely) to exit the Euro and not to apply for re-admission until they have the house in order.

That's not going to be a very popular option but it would give the Greeks a fighting chance to solve this the Greek way.

Already a large chunk of the debt was written off (in 2012) so there is some precedent for that but back then the motivation was a different one (to keep Greece in the Euro at all costs and to offload the private sector problems onto the public one).
2 comments
maxerickson 3998 days ago
If you are willing to forgive all the debt there probably isn't much reason to kick them out of the Euro. I'm not watching the situation all that carefully, but I expect that kicking them out would further damage their economy, whereas if you don't kick them out, individual actors can just note that lending money to Greece isn't a good idea (so it shouldn't be the case that they are able to quickly build up a new untenable debt).
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jacquesm 3998 days ago
It would give the power to self-determine these issues back to the Greeks, and it would forestall any re-run.
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maxerickson 3998 days ago
I don't think it is clear that an exit would forestall a re-run any better than their already ruined credibility .

(another way to look at it: the interesting question on the table is how much of their existing debt the Greeks are going to repay, future debts aren't going to be a serious problem in the short term regardless of what happens)

I also (while not thinking my opinion is worth much) think that the economic damage from an exit would likely not be worth the ability to self determine further ruinous fiscal policies.

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vidarh 3998 days ago
If you forgive all debt, there's no reason for them to exit the Euro: They've been operating at a surplus for a while now. Their required ongoing bailouts are at this point down to servicing the mountain of debt.

There's certainly many more reforms they ought to carry out, but none of them are necessary for a budget surplus if the debt is removed.

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