The case for debt relief for Greece is not as strong as many observers seem to think. Not only is debt far from the strongest drag on the country's economic growth; a reduction in Greece's nominal debt would undermine the common framework of rules and standards that underpins the eurozone.
BERLIN – With Greece’s economic crisis still raging, prominent voices, ranging from Nobel laureate economists like Paul Krugman to officials like US Secretary of the Treasury Jack Lew, are calling for more lenient bailout terms and debt relief. Even the International Monetary Fund – which, along with other European lenders, has provided Greece with emergency financing – recently joined that call. But could such an approach really be the proverbial silver bullet for Greece’s crisis?
BERLIN – With Greece’s economic crisis still raging, prominent voices, ranging from Nobel laureate economists like Paul Krugman to officials like US Secretary of the Treasury Jack Lew, are calling for more lenient bailout terms and debt relief. Even the International Monetary Fund – which, along with other European lenders, has provided Greece with emergency financing – recently joined that call. But could such an approach really be the proverbial silver bullet for Greece’s crisis?