The two polar outcomes of debt forgiveness and contract default are neither painless nor productive for society.
Instead a middle path should be taken. Greece should be given a graduated decrease in debt load.
Example. Greece pays back 10 % debt in a year then the amount is decreased by 15 to 20 %. Over time it decreases by more so long as they keep paying the amount is accelerated to zero. It's not the full amount and it's not zero.
In this way Greeks feel they can pay down debt and not lose hope. And creditors get more from Greece than default and collapse of the economy that is needed to generate money.
Instead a middle path should be taken. Greece should be given a graduated decrease in debt load.
Example. Greece pays back 10 % debt in a year then the amount is decreased by 15 to 20 %. Over time it decreases by more so long as they keep paying the amount is accelerated to zero. It's not the full amount and it's not zero.
In this way Greeks feel they can pay down debt and not lose hope. And creditors get more from Greece than default and collapse of the economy that is needed to generate money.
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