Greece Needs a Deep Debt Write-Off
Πηγή: Research on Money and Finance
Written by Costas Lapavitsas and Daniel Munevar
May 20 2014
Greece needs debt relief to generate additional fiscal space for the government, allowing it to adopt fiscal policies that could quickly facilitate recovery and growth. This is imperative in a country with adult unemployment currently standing at the extraordinary level of 27%. The real question is not whether but how to effect debt relief for the country. In this light there
are two options.
First, there is the ‘soft’ option of consensually extending the maturity of debt and lowering the average interest rate, thus reducing the annual interest outlay. This form of debt relief is preferred by the EU and the current Greek government because it would leave the nominal value of the debt intact, thus avoiding major conflict with the official lenders by protecting their interests.
(Available in Greek translation here)