A mix to make debt sustainable

The political decision to keep Greece in the eurozone for at least another year may have been made, but its creditors are doing their best to undermine it by increasing event risk and further hurting the private sector and the economy in general. In this context, debt relief as a supplement to fiscal austerity becomes more important and the government will have to formulate a strategy on debt reduction despite its limited available means. German Finance Minister Wolfgang Schaeuble is right to point out that highly indebted countries will have to reduce their debt stock by sticking to fiscal consolidation. But adopting policies aimed at producing large primary budget surpluses to gradually...

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