Milas, Costas, Panagiotidis, Theodore, Boumparis, Periklis, (2015), “On Structural Reforms and Debt Relief “, LSE blog, 15 October
The recent trip of the Greek Prime Minister to the US was dominated by repeated calls for debt relief. The Greek pile of debt, currently at 177% of the country’s GDP, is undoubtedly high (see here for a recent analysis on the sustainability of the Greek debt). In July 2015, the IMF (one of Greece’s so-called Troika partners) produced a sustainability report which raised the issue of extending Greek debt maturity. Indeed, a possible way forward for debt relief involves pushing Greece’s average debt maturity, currently at 16.5 years (see also here and here) further into the future. In its July 2015 report, the IMF also raised the issue of “voluntary” haircut in the debt holdings of Greece’s Eurozone partners. The Greek PM Speaking in September 2015 to The Wall Street Journal (here) argued that a possible Greek debt restructuring will almost immediately be followed by access to international financial markets. This, however, is not certain since getting access to financial markets works through the credit scores assigned by credit rating agencies.
- Banerji, Angana, Barkbu, Bergljot, John, James, Kinda, Tidiane, Saksonovs, Sergejs, Schoelermann, Hanni, Wu, Tao, (2015), “Building a Better Union : Incentivizing Structural Reforms in the Euro Area”, IMF publications-Working Papers, 11 September
- Müller Andr., Storesletten K., Zilibotti F., (2015), “Pragmatism, the Greek crisis, and structural reforms: What theory says”, Voxeu, 27 May