According to the article, in 2010 the Greek government received one of the “biggest bailout programs in history” but the Greek debt wasn’t reduced. Greece’s foreign creditors refused any haircut and Greek taxpayers shouldered the burden of the bailout program while creditors had no losses.
“There’s been some limited bailing in of creditors since then, an extension of maturities and lowered interest rates, but the basic pattern hasn’t changed. As a result, Greece’s debt keeps rising. It now stands at roughly 180% of GDP” says the article. A recent Bloomberg report showed that the new agreement discussed by Greece and troika would extend Greek loan maturities, to 50 years from 30, and would lower the interest rate by 0.5%.
Bloomberg believes that the troika’s policy has failed as “politics and economics refuse to play along.” Although it is estimated that Greece is recovering, citizens feel frustrated and disappointed as unemployment keeps rising and austerity measures continue. Troika’s demands may benefit the country but Greek citizens have lost their faith.
The article points out that this won’t be the last time that creditors are struggling with the Greek debt as they repeat the same mistakes. A haircut of the Greek debt is seen as necessary.