What is “déjà vu” in Greek?

It seems that nothing has changed since I wrote this post in April 2010.

You have to wonder what has been achieved during the intervening years.  With Greek GNP having dropped by 25% and youth unemployment at 60%, there seems to be no way that they can repay the level of current debt.  And this is at a time when we have extremely low interest rates internationally.

Greece now wants a 30% write-off of its debts as well as a significant restructuring of the remainder.  This hasn’t actually been asked for as yet but it is expected to be presented at the summit this week.

While the 30% may never be paid, I don’t think there should be a write-off, at least not now.  It could be ring-fenced as a non-performing loan and not attracting interest but with the possibility of being written off in the future if Greece sticks to whatever commitments it is prepared to make.  Given the behaviour of Greece over the last few months and the insults hurled at some other members of the EU who have been helping Greece stay afloat, I see no reason to relieve the obligation even if we choose to relieve the pressure.

This could be a way to accommodate the needs of Greece and the political difficulties faced by other Euro countries, especially Germany.  And let’s not forget Ireland and Portugal (and to a less formal degree, Spain) who have received financial support from the EU without any write-offs but, on the contrary, have ended up paying substantial premiums for such help.