There is a Solution for Greece
Greece is on the edge to sink under the burden of its debt. The overall dept is about 500 billion euros owed to European taxpayers, rescue funds, banks and bondholders. The country cannot service its debt if creditors do not release the funds, Bloombergs reports.
The country is running out of cash. The public dept was 325.5 billion euros in the middle of last year, but it is about half a trillion euros including bank and company debt. Finance Minister Varoufakis suggested exchanging ECB-owned debt for perpetual bonds, which will help to remove the burden of repayments. The European Central Bank has always resisted a voluntary haircut on its debt, which can be considered as monetary financing and this one is banned under EU law.
So, it is suggested that all official dept of Greece to be transformed into a perpetual bond. A perpetual bond is also known as a "consol". The advantage of this type of bonds is that they are not redeemable but pay a steady stream of interest forever. Moreover it can be treated as equity, but not dept. If all the Eurozone members agree on this, it can be a solution for Greece in order to come out from the deadlock economic crisis.
Other materials on this subject
- Greece Emerges from Eurozone Bailout Programme The economy has grown slowly in recent years and is still 25% smaller than when the crisis began.
- Greece Can be Competitive Once Makes Reforms: Schaeuble Greece can have a competitive economy once it makes reforms agreed with its euro zone creditors, German Finance Minister Wolfgang Schaeuble said on Monday.
- Greek Unemployment Rises to 23.4 Percent in August, Eurozone Highest Greece's unemployment rate has come down from record highs but remains more than double the euro zone's average of 10 percent in August.
- Eurogroup to Disburse 10.3 bln Euros to Greece The Eurogroup also recalled the medium-term primary surplus target for Greece at 3.5% of GDP as of 2018 and underlined the "importance of a fiscal trajectory consistent with the fiscal commitments under...
- 48-Hour Strike Began in Greece Public transport workers joined the strike. Today and on Saturday in the Greek capital metros, trolley buses and trams will not work.
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