Varoufakis said he would prefer cutting his arm off rather than signing a deal that does include debt restructuring. While he may not sign such a deal, new finance minister Tsakalatos might have this pleasure.
Even before the Greferendum and especially afterwards, the pressure has been growing for some kind of debt relief for Greece. This is clearly necessary. Otherwise, creditors will lose even more, especially in case of a Grexit. We have already noted 5 developments. Here are 5 more developments:
- Schaeuble: The outspoken German finance minister made this amazing statement. He admitted that Greek debt sustainability is not feasible without a haircut and basically agrees with the IMF. However, there will not be a haircut because it is against the rules. Yes, he talked about a haircut, aka write-down, more than the restructuring that Greece asks for. Basically, he says Greece’s debt is unsustainable, so why not make it so? Does he prefer sticking to the rules and losing more money?
- Merkel: His boss, Chancellor Angela Merkel, refused to grant a “classic haircut”. By rejecting only a “classic” haircut, she did leave the door open to debt restructuring.
- Tusk: The EC President repeated his stance that debt sustainability has to be part of the deal.
- Lagarde: After the IMF was forced to publish its report, Lagarde said it out loud in a public appearance and added more of the IMF’s weight into the
- Lew: Also the US Treasury Secretary said out loud what he already wrote and raised the tone. It wasn’t a hint anymore. He said that Europe must restructure Greece’s unsustainable debt.
- It’s already in the works: European commission vice-president Valdis Dombrovskis said that the troika is already working on a debt sustainability analysis.