Shvetz: I'm sure Greece will be able to reach deficit targets by spending cuts. Everybody knows that the best way to grown an economy is to stop spending.
Debeo Summa Credo: Shvetz: I'm sure Greece will be able to reach deficit targets by spending cuts. Everybody knows that the best way to grown an economy is to stop spending.From whom should Greece borrow money to avoid austerity?
spawn73: Debeo Summa Credo: Shvetz: I'm sure Greece will be able to reach deficit targets by spending cuts. Everybody knows that the best way to grown an economy is to stop spending.From whom should Greece borrow money to avoid austerity?I guess he is criticising the IMF and the EU for not being sensible and allowing Greece to have a huge deficit, and to not keep lending them money. But really, does anyone seriously feel that way?The only other alternative, maybe that's what he means, is that Greece leaves the Euro so that it can print its own Drachma. Best case scenario, all the debt of Greece is forgiven, they start with a clean slate, just using Drachma. Reality would still hit them really fast and hard though.
Debeo Summa Credo: spawn73:How about this, all Greece's debt is forgiven, but they stay in the Euro. And they'd be allowed to run any deficit they want, until their national debt is 60% of GDP or they fix their economy through crowth, whatever comes first. Would that work?Greece's debt being forgiven would be a huge giveaway from solvent Europe to Greece, which would be met with outrage from Western Europe's electorate. Merkel would be out on her ass and there would be no way that the ECB/IMF would then lend more to Portugal, Spain, et al because of the likelyhood that they'll be asking for the same deal at some point. German, Dutch, Finnish voters etc. wouldn't allow further lending at that point.The troika is walking a thin line right now pushing Greece to make needed reforms to improve competitiveness while still maintaining the belief that they'll get paid back fully at some point. They are hoping that by kicking the can down the road they can reduce the real value of Greece's debt while avoiding an outright default (appeasing voters), and maybe down the road there will be enough for Greece to pay back their debts. I think things will break and Greece will default at some point, however, and they may have been better off kicking Greece out last year.
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