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Economics

Greece Needs Debt Forgiveness

Europe should extend the debt-burdened Greeks some relief
Job seekers wait outside an employment center in Thessaloniki, Greece, on Nov. 13
Job seekers wait outside an employment center in Thessaloniki, Greece, on Nov. 13Photograph by Konstantinos Tsakalidis/Bloomberg

Greece and its creditors are wrestling with the country’s debts yet again. In 2010, Greece was given one of the biggest bailout programs in history. It got new lending in return for fiscal austerity, but its debts weren’t reduced: Creditors were spared any write-offs. Experts objected that the program put too big a burden on Greek taxpayers, was neither politically nor economically sustainable, and would need creditors to absorb some losses. They were right then, and they still are.

Despite limited moves to force creditors to take more responsibility, such as an extension of maturities and lowered rates, the basic pattern hasn’t changed. As a result, Greece’s debt keeps rising. It now stands at 180 percent of gross domestic product.