Greece : No new money but a 5 year-moratorium

We do not have any agreement of the Eurogroup yet but nevertheless we made progress:

– Greece came back with serious reform proposals,

– France is back in Europe, still low profile but very much active, which is an extremely good news,

– A Grexit is still possible but less and less realistic in my opinion.

The main concern now is that the Eurogroup spends too much time and is torn with false good ideas.

To discuss disbursement of new help package is a very bad idea. With 320 bn € debt Greece has way enough debt, to add 80 bn€ would be non-sense. It would be crazy to continue piling up debts which would not be reimbursed and which just add complexity for all parties.

What Greece really needs is not money but time. Time to create an efficient administration, time to implement reforms and take the benefice of them. New money and new debt will not bring time, it will only weight on Greece future further. The real way to give time to Greece is to decide a moratorium on the debt, to restructure the reimbursement schedule in order to give few years free of any payment, neither in capital nor in interest. I would suggest a 5 year-moratorium, which would however be interrupted as soon as Greece would not comply with a pre-agreed precise reform calendar.

It would also have the great advantage to put Greece really face to its responsibilities instead of always hoping for new money to come.

On the second front of the Greek crisis, i.e. on the banking crisis, here again I would be cautious. First I think that an ambitious moratorium on the debt would show to the Greek people that Europe finally understood something, and this alone might stop the money withdrawals from the banks, and then significantly reduce the pressure on the banks. And if not, then I would be tough and would accept to bear the consequences of not rescuing the Greek banks.

Europe should stop thinking that new money is the solution to any issue. It is a simplistic approach which creates quite complex problems, which quickly become unsolvable…

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