The Threat of Greek Debt Relief by Christoph M. Schmidt - Project Syndicate

The Threat of Greek Debt Relief by Christoph M. Schmidt - Project Syndicate

Greece will likely depend on concessional funding from official sources in the years ahead – funding that is conditional on reforms, not debt ratios. 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 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.