This is an excellent article from European think-tank, Bruegel. It argues that the Eurogroup faces a difficult choice on Greece — implementing a debt reduction plan drastic enough to make a return to market borrowing possible, or agreeing to a fourth financial assistance programme and continuing to fund Greece at the preferential lending rate.
Source: Debt relief or a fourth financial assistance programme for Greece? | Bruegel
Greek debt is an emotional subject, depending upon your perspective. It’s necessary to perhaps examine some of the history. German and French banks loaned vast amounts of money to Greece, based on questionable commercial assumptions. Throughout, German and French banks have been protected from taking write-downs on the loan portfolio – emergency assistence came in the form of soft loans from the the Eurogroup. But the loans contained stringent terms on Greece that brought Greece to her knees, with widespread, unemployment, suicide and collapsed governments. It’s important to remember that the situation was triggered by the articial rules to support the Euro post the financial crash of 2008. Germany has consistently refused to inflate her economy, which has triggered widespread erosion in living standards in many Southern European countries.
Still today the real challenge remains the Euro.
Greece has been promised debt relief before but it failed to materialize because of powerful lobbying from German and French banks. Now France has a new president in Macron and we must see if he’s ready to reach our a helping hand to a fellow European country.
I hope that Greece gets a measure of debt relief but I fear not.
Thoughts?
Dr Alf's Blog 
I totally agree with you, Dr. Alf! Bottomline, the culprits are the German and French banks who took advantage of Greek gullibility, naiveté and enthusiasm fueled by the 2004 Olympics Games that were held in Greece. Poor Greeks, they thought that at last they had made it in Europe and in the developed world! They paid dearly for that mistake while the French and German banks were fully protected from any consequences of their mischief – misdoings is a better word for the things they did – by stupid politicians.
Stupid politicians or part of the deal, and therefore guilty themselves? We’ll never know. But I consider Merkel fully responsible for the mess the Euro has become. What happened is not the fault of the Euro, it’s Germany’s fault for not allowing the completion of the process that would establish a strong European common currency. It requires “mutualization of the debt”, which is fundamentally what the Americans do with their dollar. The Federal Reserve guarantees the debts of the individual states and if Porto Rico has a problem with its debt now, it’s because it’s not recognized as a State!
Debt mutualization is absolutely key to make any common currency work. Nothing less than that will do. Macron knows this, Merkel doesn’t or denies it (rather, the guilty person here is her abominable financial minister Schaube whose grasp of economics is abysmal).
You’re right, much depends on whether Macron can convince Merkel…Let’s hope he can, otherwise Greece is going to face many more personal pain and “lost decades”…
Dear Claude, my apologies but I missed your posting.
We are in total agreement here and I thank you for your points of clarification.
Sadly, we live in a world where the truth is often getting subordinated or supressed, so it’s good that we can reach to fellow believers.
Thanks again for your support
Alf