How to End the Greek Tragedy
Greece’s debt-service burden is too large, and it must be reduced in one of two ways: sharply cutting the interest rate paid by Greece, or reducing the face value of the debt. European policymakers are leaning towards the second option, but they evidently have not yet fully considered the implications.
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SANTIAGO – European leaders, faced with the reality of an insolvent Greece, are reportedly now considering a “Plan B” that would involve reducing the burden of its future debt payments. This is a welcome contrast to the options considered so far, all of which involved – under different guises – foisting more debt onto a country that has too much of it already.