Greek Debt Still Unsustainable; Eurozone Leaders Still Refuse to Admit It

Fight disinformation. Get a daily recap of the facts that matter. Sign up for the free Mother Jones newsletter.

This week brought yet more talks on Greek debt and yet more denying of reality. The Greeks are mad, the Germans are tired, and everyone knows something has to give.  The Guardian summarizes:

Why the talks failed

While finance ministers were arguing last night, Reuters got their hands on a document prepared for the meeting. It showed that Greece’s debts can only be cut to a sustainable level if eurozone countries accept losses on their loans to Athens, provide additional financing or force private creditors into selling Greek debt at a discount.

….It said that either member states accept “capital losses or budgetary implications”, or push back the target date for Greece’s debts to fall to 120% of GDP by two years, to 2022. Eurozone countries are not, yet, prepared to accept the first option, while the second option is unacceptable to the IMF. Thus deadlock.

That’s about the state of things. Greece’s debt is flatly unsustainable, and the technocrats know it—when they’re writing for private consumption, anyway. At some point, eurozone leaders are either going to essentially forgive all of Greece’s debt or else Greece will leave the euro.

Writing off Greece’s debt is actually doable because Greece is a fairly small country. But everyone is afraid that if they do it, then Spain, Portugal, and Ireland will all want the same treatment. And that’s not doable. Thus the impasse.

For now, anyway. In a few days everyone will figure out yet another can-kicking exercise, and the immediate crisis will be averted for another year or so. Unless some other country blows up in the meantime, of course.

HERE ARE THE FACTS:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

ONE MORE QUICK THING:

Our fall fundraising drive is off to a rough start, and we very much need to raise $250,000 in the next couple of weeks. If you value the journalism you get from Mother Jones, please help us do it with a donation today.

As we wrote over the summer, traffic has been down at Mother Jones and a lot of sites with many people thinking news is less important now that Donald Trump is no longer president. But if you're reading this, you're not one of those people, and we're hoping we can rally support from folks like you who really get why our reporting matters right now. And that's how it's always worked: For 45 years now, a relatively small group of readers (compared to everyone we reach) who pitch in from time to time has allowed Mother Jones to do the type of journalism the moment demands and keep it free for everyone else.

Please pitch in with a donation during our fall fundraising drive if you can. We can't afford to come up short, and there's still a long way to go by November 5.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate