Nicholas Economides, Stern School of Business, NYU
We are at the most critical phase of the negotiation, and it is imperative that Greece signs an agreement with the Europeans avoiding bankruptcy and the disaster of the New Drachma. The government says that it will accept an agreement only if it contains a solution on the debt. Before the elections, Syriza had proposed wiping out a large percentage of nominal value the debt (over 50%) to European countries and the European Stability Mechanism. This is practically impossible because every euro that Greece would win would have to be paid immediately by the European tax payers. The Greek parliament would not be willing to gift billions to the Finns, the Dutch, the French, etc.; likewise they would not be willing to give such a gift to Greece.
However, there exists another way to restructure the debt that I have proposed three years ago. Read full article