Abstract

Sovereign debt is not a zero sum game: everyone takes on the pain. The question is how much more the Greeks are prepared to take in the form of austerity measures. As the country is perched on the precipice of default, it is looking at offers to stave off default. All of them come with conditions of shared pain. Greece might prefer to default and write off some of the debt as any further offer would come with additional debt service obligation, but any rollover would be accompanied by more promises of stringent public spending. On the other hand, it is simply impossible to look away and pretend the problem does not exist.