Debt relief for Greece is necessary to avoid a crisis in the Eurozone

On 25 January 2015 Greece will hold parliamentary elections. The elections have generated uncertainty in the Eurozone given the potential for the radical left party Syriza, which has called for a renegotiation of the country’s bailout conditions, to emerge as the largest party.

Paul De Grauwe writes that even if Syriza fails to win power in the upcoming elections, the debt problem in Greece will ultimately require a balance to be found between the interests of creditors and debtors. Unless the political leaders of the Eurozone accept some form of debt relief for the country (and for other countries in the Eurozone periphery) a crisis will be inevitable in the long run.

See also the related url report by Andrew Watt 'Is Greek Debt Really Unsustainable?'.

• Primary Source

ESO: Background information: The Greek debt crisis: Key sources http://www.europeansources.info/record/the-greek-debt-crisis-key-sources/

ESO: Background information: Europe is now on course for a showdown between Alexis Tsipras and Wolfgang Schäuble over Greek debt http://www.europeansources.info/record/europe-is-now-on-course-for-a-showdown-between-alexis-tsipras-and-wolfgang-schauble-over-greek-debt/

ESO: Background information: Greek legislative election, 25 January 2015 http://www.europeansources.info/record/greek-legislative-election-25-january-2015/

Social Europe Journal: Occasional Paper, No.6, January 2015: Is Greek Debt Really Unsustainable? http://www.socialeurope.eu/occasional-papers/op-6-greek-debt-really-unsustainable/

The Irish Times, 11.01.15: Greeks deserve same debt relief as Germans got (via Euro|Topics) http://www.eurotopics.net/en/home/presseschau/archiv/aehnliche/archiv_article/ARTICLE156384-Greeks-deserve-same-debt-relief-as-Germans-got

Naftemporiki, 13.01.15: Make most of support for Greek debt restructure (via Euro|Topics) http://www.eurotopics.net/en/home/presseschau/archiv/aehnliche/archiv_article/ARTICLE156480-Make-most-of-support-for-Greek-debt-restructure

Blog: Bruegel, 09.01.15: How to reduce the Greek debt burden? http://www.bruegel.org/nc/blog/detail/article/1533-how-to-reduce-the-greek-debt-burden/

EurActiv, 16.01.15: Greeks step up bank withdrawals fearing election aftermath http://www.euractiv.com/sections/euro-finance/greeks-step-bank-withdrawals-fearing-election-aftermath-311333

Social Europe Journal, 14.01.15: Let’s Hope For A Syriza Victory! http://www.socialeurope.eu/2015/01/lets-hope-syriza-victory/

EUObserver, 19.01.15: Fiscal hawks warn against Greek debt write-off https://euobserver.com/economic/127257

EurActiv, 20.01.15: Moscovici: EU prepared for all scenarios after Greek vote http://www.euractiv.com/sections/euro-finance/moscovici-eu-prepared-all-scenarios-after-greek-vote-311394

openDemocracy: Can Europe Make It?, 23.01.15: Six key points about Greek debt and the forthcoming election https://www.opendemocracy.net/can-europe-make-it/tim-jones/six-key-points-about-greek-debt-and-forthcoming-election

---