Project Syndicate: El-Erian: Time for IMF, eurozone to agree on a real solution for Greek debt crisis

ZURICH (Project Syndicate) — The International Monetary Fund has resurrected an old technique — commonly used in the 1980s during the Latin American debt crisis — that would allow Greece to avoid a payment default next month on debt owed to European creditors.

The reprieve also gives the IMF and its European partners time to sort out their technical differences on the struggling country’s growth and budget outlook. But the Fund’s elegant compromise still leaves Greece under the shadow of an enormous debt overhang; reducing it requires that Europe find a way to set aside national politics and act on the basis of economic logic and necessity.

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