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Debt forgiveness for Greece says Bloomberg

An article in Bloomberg entitled “Europe Can't Let Greece Drown in Debt,” notes that Greece and its creditors are wrestling with the country's debts yet again.

The article begins with the admonition that “as long as they keep making the same mistake, the next agreement is no more likely to succeed than the others.”

Among the mistakes mentioned are the burden placed on taxpayers and the fact that creditors were not forced to take losses. David Shipley, the author, believes this still holds, despite some limited bailing in of creditors, making the debt unsustainable.

Mention is made of the new bailout plan under discussion, i.e. to extend Greek loan maturities to 50 years from 30, and to lower the interest rate paid by 0.5 percentage point, as well as, another bailout loan, adding 15 billion euros.

But as is pointed out, the math just doesn't cut it, while complicating the picture is civic unrest caused by harsh conditions and rampant unemployment. A point that is underscore is that “the pro-bailout coalition that rules Greece is fragile”

The article also doubts the government's commitment to reform, a doubt also harbored by creditors, but ends up noting that “Greece still needs debt forgiveness -- and the European Union needs to show that it's capable of learning from its mistakes.”