To that lack of courage by the Greeks to confront their decision-makers must we attribute the fact that the Greek government can not take a strong position in the European forums. But first, the Greeks should bring to justice their corrupt politicians and businessmen: All those who put on the backs of the taxpayers a debt that was essentially private. To solve the problem of the Greek debt, just let's find out how much real money was borrowed, a quantity that must be much lower than the figures used. The banks that lent money to Greek banks, lent money that probably was neither real, that did not exist. It would be enough then, (being before an Europe-wide and not jus Greek emergency situation like this) to cancel the debt in the appropriate part. Banks, due to the law of fractional reserve often lend money that does not exist, that they don't have if the borrower can not repay the money, that money is not lost, because it simply didn't exist. With regard to the issue of the Greek debt, first of all we should ask ourselves how much of this debt is real. In the meantime, Greece must implement the structural reforms needed to restore the country’s long-term growth prospects and thus to strengthen its capacity to repay its creditors without a large nominal debt reduction. Greece’s nominal debt stock will matter only once the country re-enters the debt markets and becomes subject to market, not concessional, borrowing terms. In fact, Greece will likely depend on concessional funding from official sources in the years ahead – funding that is conditional on reforms, not debt ratios. While Greece’s public debt is undeniably high, and evidence abounds that high debt can hold back economic growth, the country faces even stronger drags on growth, including structural weaknesses and political brinkmanship, that must be addressed first. But could such an approach really be the proverbial silver bullet for Greece’s crisis? Even the International Monetary Fund – which, along with other European lenders, has provided Greece with emergency financing – recently joined that call. 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.
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