Either Greece would start living within their means, or -- as the case is now -- other countries are giving money to Greece so Greece can e.g. pay pensions to their citizens.
But in the long run, they may run out of other countries willing to give them money, and then they must start living within their means.
Dropping the debt burden in the short term strikes me as the most effective way to give Greece the time to make those adjustments. If the interest generated on the debt was frozen and payments deferred for a few years, and no extra loans given, Greece could readjust, but with debt of approximately 150% of GDP and restrictive austerity demands made by those who hold the debt, Greece has limited opportunities to find the growth it needs to 'balance the books'. You could look at the pensions issue as an example of living beyond their means, or you could look at it as a high portion of GDP only because the growth wasn't strong enough. Focus on growth and the pension issue becomes far less significant.
Debt servive is a problem and it seems like much of Greece's debt should simply be written off, but Greece pretty consistently runs a primary deficit; even the years in which they've claimed a primary surplus, the numbers have turned out to be very sketchy.
Supposedly Greece had small signs of growth in 2014, but I'm not clear on how accurate these claims were. From what I've read the last clear signs of growth that Greece had was around 2008 (before the global economic recession), is this claim also sketchy?
Because they don't have to spend much to service their current debt. Maturities have been extended, the interest is artificially low, payment of interest has been postponed. There are other EZ countries that have to spend quite a bit more to service quite a bit less debt because they were not as special as Greece.
Greece has been giving enough time to reform itself. It refused to do so. You propose to give them more time? It won't change anything. Open your eyes.
Greece hasn't been given any time to effectively reform since 2010. Austerity hinders growth, and growth is the only reasonable solution (in the short term at least). With the EU demanding austerity meant Greece had little room to improve their situation. Also remember the stats I shared with you before, the vast majority of the last loan went to the banks and paying off the prior loan payments, the money available to the Greek people to grow the economy was far less. Pausing the debt burden would give time for growth that Greece hasn't had since 2010.
Either Greece would start living within their means, or -- as the case is now -- other countries are giving money to Greece so Greece can e.g. pay pensions to their citizens.
But in the long run, they may run out of other countries willing to give them money, and then they must start living within their means.