Saving Greece is in Germany's best interest

Saving Greece is in Germany's best interest

1) The Greeks have met all their creditors’ demands, but the Germans object to the reliance on taxation, a needed change in a country where tax evasion is rife. 

 

2) Greek debt levels became unsustainable in the financial crisis when the Greeks borrowed to bail out German banks that had made bad loans to Greece.

 

3) Germany benefits from keeping Greece in the eurozone because that keeps the euro cheap and boosts exports. 

 

4) Germany will lose $100 billion if the Greeks default.  Better for the Germans to cut the debt by 50% and get paid.  Private lenders have written down their loans to Greece.  The Germans can too.

 

5) Greece is running a budget surplus before debt payments.  They can pay something.  Default is not necessary.

 

The crisis in Greece will be resolved if the Germans do what is best for themselves, and they usually do.

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