The Financial Times argues that Greece’s debt pile is no longer unsustainable because of the favourable terms under which it has been credit by Eurozone countries.

An IMF claim that Eurozone countries have to write off Greece’s debt to make it sustainable is, therefore, false. The IMF claim is a political strike at the stability of Eurozone governments, who will have to explain to their angry voters the loss of 200 billion euros, the amount of Greek debt Eurozone governments are believed to hold.

The problem plaguing the Greek economy is now no longer the size of its debt, especially not with the generous bailout packages. It is the corruption of the bankster puppet government, which keeps using austerity packages to target tax increases at the productive sectors of the economy instead of cutting generous upper tier supplementary pension and other government waste.

More than 300,000 Greek pensioners are estimated to draw more than 1,500 euros a month. Yet the government of Alexis Tsipras refuses to cut these higher end pensions because pensioners are his core voters. Instead of cutting the pensions of the bureaucratic and technocratic elite, Tsipras continues to cut the pensions of those who already have very little and increase taxes on businesses.

Greek Pensions are Third Highest Among 34 OECD Nations

It is a matter of common sense that if tax increases wipe out large sections of the economy, government tax revenue will fall overall, requiring another round of tax increases on the remaining businesses, pushing the entire economy into a downward spiral.

Pensions will have to be cut eventually only it will happen against the background of an economic wasteland. The younger generation especially will have nothing left, no jobs, no savings, no business opportunities, no property.

So, the main problem facing Greece right now is not its debt burden. It is the policies of a banker run government, which is torching the economy, driving the country deeper into a debt death spiral, and preparing to buy up its assets for a pittance.

The amount Greece pays each year to service its debts has steadily come down and could be as low as 4.3 per cent of gross domestic product, less than Italy or Portugal.

Eurozone governments, who hold directly or via the European Financial Stability Facility, about 2 billion euros of Athens’ 300 euro debts, have significantly cut the burden of the debt for Greece since 2010.

“The maturity on the bilateral loans provided by eurozone member states in May 2010 has been extended to 2041 and the interest rate cut from between 300 and 400 basis points over the three-month Euribor rate, to just 50.

The EFSF loans, whose yield is just one basis point over the average borrowing cost of the EFSF itself, now have an average maturity of more than 30 years. In 2012, the eurozone finance ministers agreed on a grace period of 10 years over which Athens will have to make no principal repayment.

As a result of these changes, the average maturity of Greece’s debt is now 16.5 years, double that of Germany and Italy, according to data compiled by Joakim Tiberg, a strategist at UBS. Portugal and Ireland, which also benefit from favourable terms for their own bailout loans, have average maturities of 11 and 12.5 years, respectively.”

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