Griechenlands Schuldenkrise: Welcher EU-Rettungsmechanismus?
Greece’s Imminent Default: What is the EU Supposed to Do?

Summary/Abstract: Greece is expected to default on its unbearably heavy public debt soon. All hitherto attempts to help the country avoid an insolvency failed because the “rescue” provided by the EU and the IMF wasn’t a rescue at all. Worse, the 110 billion Euro financial package came at an interest rate too high to be borne and the accompanying austerity program only darkened the growth prospect of the economy. What is needed is a real relief in the form of a transfer of some 50 percent of Athens’s outstanding debt to the EU. To fund the deal some 160 billion Euros now available in the European Financial Stability Facility have to be drawn. Germany’s share would be roughly 1.36 percent of GDP – an acceptable cost of avoiding an out of control contagion across the entire euro area.

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