Pretty much everyone agrees that Greece needs debt relief; what they don't agree on is what debt relief means, Reuters reported today. Easing Greece's fiscal path forward is likely to be the next great struggle in the country's agonizing, seven-year, three-package bankruptcy saga now that a bailout pact has opened the door a crack to discussions on relief. At the last count, the Greek government owed 314 billion euros ($343 billion) despite writing off about 100 billion euros owed to private bondholders in 2012. That's more than the gross domestic product of South Africa. It's also equivalent to around 179 percent of Greece’s GDP, a ratio which despite improvements in the country's economic performance goes up every time lenders make a bailout payment to Athens. This is why debt relief is on the agenda — with Greece perhaps quixotically pushing for something as early as May 22, when the Eurogroup of euro zone finance ministers meets to sign off on Tuesday's staff-level pact on support for Athens. The battle will be fought on a number of fronts. There is the issue of whether the International Monetary Fund will participate financially in the current, third bailout. The IMF says Greece's debt is unsustainable and it doesn't want to keep throwing money at the problem while that is so. Indeed, it is not allowed to by its charter. The European Union lenders want the IMF involved, primarily because it brings in an outside enforcer. But Europeans themselves have so far refused to say what they plan to do, preferring a general pledge to provide debt relief once certain reform criteria are achieved. Germany, for one, does not want to show this year's voters it is doing Greece a favor using German taxpayers' money.
