Escalating crisis in the eurozone: the case for conditional debt relief for Greece

In this statement the European Shadow Financial Regulatory Committee (ESFRC) is advocating a conditional relief of Greek’s government debt based on Greece meeting certain targets for structural economic reforms in areas 
In this statement the European Shadow Financial Regulatory Committee (ESFRC) is advocating a conditional relief of Greek’s government debt based on Greece meeting certain targets for structural economic reforms in areas such as its labor market and pensions sector.The authors argue that the position of the European institutions that debt relief for Greece cannot be part of an agreement is based on the illusion that Greece will be able to service its sovereign debt and reduce its debt overhang after implementing a set of fiscal and structural reforms. However, the Greek economy would need to grow at an unrealistig level to achieve debt sustainability soley on the basis of reforms.The authors therefore view a substantial debt relief as inevitable and argue that three questions must be resolved urgently, in order to structure debt relief adequately: First, which groups must accept losses associated with debt relief. Second, how much debt relief should be offered. Third, under what conditions should relief be offered.
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Metadaten
Author:Reinhard H. Schmidt
URN:urn:nbn:de:hebis:30:3-365939
URL:http://safe-frankfurt.de/de/policy-center/publikationen/detailsview/publicationname/-45ebf49107.html
Parent Title (English):SAFE policy letter series ; 43
Series (Serial Number):SAFE policy letter series (43)
Publisher:SAFE
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Date of Publication (online):2015/07/06
Date of first Publication:2015/07/06
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2015/07/27
Tag:debt sustainability ; greek crisis; structural reforms
Pagenumber:6
Last Page:4
HeBIS PPN:362914877
Institutes:Wirtschaftswissenschaften
House of Finance (HoF)
Center for Financial Studies (CFS)
Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:330 Wirtschaft
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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