May 14, 2016 – Pagina 99 published an editorial by SEP Scientific Council member Francesco Saraceno, in which he discusses the thorny issue of debt relief for Greece. With no significant economic growth, Greece’s bankruptcy this Spring seems inevitable. The International Monetary Fund’s Christine Lagarde has stated that Greece will not be able to recover if all aid is channeled exclusively to the repayment of old debts. The IMF deems this a vicious cycle that will suffocate normal economic functions, and the only escape route is to stop making payments. It argues that debt restructuring is part of the classic recipe created by the Washington Consensus. At this time, debt repayment is practically forcing a double dose of austerity, which is holding the country back and obviating its many sacrifices and reforms. However, while France is very cautiously opening the door for negotiation on this issue, German seems steadfast in its commitment to make sure every cent is paid back.
- The original article (in Italian) is available from Pagina 99.