{"id":9707,"date":"2017-08-04T02:43:59","date_gmt":"2017-08-04T02:43:59","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=9707"},"modified":"2017-08-05T02:47:46","modified_gmt":"2017-08-05T02:47:46","slug":"how-greece-could-escape-debtors-prison-if-europe-opens-the-door","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/how-greece-could-escape-debtors-prison-if-europe-opens-the-door\/","title":{"rendered":"How Greece could escape debtors’ prison \u2013 if Europe opens the door"},"content":{"rendered":"

C. Randall Henning<\/a>, American University School of International Service<\/a><\/em><\/span><\/p>\n

Greece has acted out a European tragedy for more than seven years. But some signs suggest Greece may finally, in the words of its economy minister<\/a>, be on the way to becoming a \u201cnormal country\u201d again. <\/p>\n

Greece\u2019s creditors have disbursed<\/a> another chunk of funds as part of Greece\u2019s current, \u20ac86 billion (US$100 billion) bailout, and the country recently tested the bond markets<\/a> for the first time in three years, planning to borrow more from private investors soon. Some now believe<\/a> Greece may soon follow fellow bailed-out countries Ireland<\/a> and Portugal<\/a> in their revivals. <\/p>\n

But despite the wave of optimism<\/a>, Greece\u2019s staggering amount of debt looms menacingly over the country\u2019s economy and future. And the International Monetary Fund (IMF), while endorsing Athens\u2019 reform program, is urging its fellow creditors to offer Greece much greater debt relief<\/a>. <\/p>\n

In my recent book, \u201cTangled Governance<\/a>,\u201d I examined the financial rescue programs for euro area countries, including three for Greece, and the conflicts over them. My own research supports the view that Greece needs to finally be released from debtors\u2019 prison but for political reasons more than the financial arithmetic at the core of the institutions\u2019 debt analyses. <\/p>\n

And there\u2019s a way to do that which makes the pain bearable for everyone and opens a path back to normalcy. <\/p>\n

\n \"\"
\n Protesting hospital staff sit in front of a wall they built in front of the Greek Finance Ministry with a banner depicting their leaders wearing ties that read \u2018Ministry of broken promises\u2019 and \u2018We drown in debt and bailouts.\u2019<\/span>
\n AP Photo\/Petros Giannakouris<\/span><\/span>
\n <\/figcaption><\/figure>\n

A great depression<\/h2>\n

Over the last seven years, we have witnessed many 11th-hour crisis meetings and last-minute rescues that, after much brinkmanship and grinding of teeth, each time seemed to narrowly avert the Greece\u2019s ejection from the euro area. <\/p>\n

You\u2019d be forgiven for becoming numb to the continual travails of a modestly sized country in the southeastern corner of Europe. That would be a mistake: Greece\u2019s tenuous position in the euro area weakens long-term confidence in European integration. Moreover, as a key NATO ally, located in a strategic corner of a volatile region, its economic and political stability are essential to European security. <\/p>\n

To stabilize its finances and avoid expulsion from the euro area, Greece has undertaken a wrenching series<\/a> of government layoffs, budget and pension cuts, and tax reforms, among other measures, at the insistence of the IMF, European Commission (EC) and European Central Bank, which together make up the so-called troika of public lenders to the beleaguered country. <\/p>\n

So far, the troika has lent Greece about \u20ac265 billion<\/a> in three separate bailouts, with the latest one set to expire next summer. Separately, Greece managed to restructure its private sector debt in 2012, reducing the amount it owed investors by about 53 percent.<\/p>\n<\/p>\n

\n