Source:http://blog-imfdirect.imf.org/2015/06/14/greece-a-credible-deal-will-require-difficult-decisions-by-all-sides/
"The primary surplus in the (Greece) program was to be 3% in 2015, and 4.5% next year. Economic and political developments have made this an unattainable goal, and the target clearly must be decreased. "
"A lower target leads to a less painful fiscal and economic adjustment for Greece"
" Greek citizens, through a democratic process, have indicated that there were some reforms they do not want. "
"We are open to alternative ways for designing both the VAT and the pension reforms, but these alternatives have to add up and deliver the required fiscal adjustment."
"the European creditors would have to agree to significant additional financing, and to debt relief sufficient to maintain debt sustainability.We believe that, under the existing proposal, debt relief can be achieved through a long rescheduling of debt payments at low interest rates. Any further decrease in the primary surplus target, now or later, would probably require, however, haircuts."
Our Note: There are also sentimental references in the press to the London Agreement deal to manage Germany’s debt load after World War Two. Germany had to pay even Greece and that time the terms so kindly in favour of Germany included: 1) Debt relief, ie a “haircut” or reduction in total debt ; 2) Payments significantly extended deep into the future (Deep discount) (Germany only recently completed its London Agreement debt payments from 1953) and, 3) the ability to repay was based on the German economic performance and Germany's ability to pay.
The biggest lesson of history is that people forget history. "London is to Paddington, what Pitt is to Addington". (Aldous Huxley) . Greece is not Germany!!!
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