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Bloomberg: Europe can't let Greece drown in debt!

Greece still needs debt forgiveness and the European Union needs to show that it's capable of learning from its mistakes, the agency said

Greece and its creditors are wrestling with the country's debts yet again. It probably won't be the last time.

According to today’s editorial of Bloomberg, as long as they keep making the same mistake, the next agreement is no more likely to succeed than the others.

Back in 2010, Greece was given one of the biggest bailout programs in history. It got new lending in return for fiscal austerity, but its debts weren't reduced: Creditors were spared any write-offs. Experts objected that the program put too big a burden on Greek taxpayers, that this was neither politically nor economically sustainable, and that creditors should be made to take 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 percent of gross domestic product. This is plainly unsustainable.

The new fix under discussion, according to a recent Bloomberg News report, would extend Greek loan maturities further, to 50 years from 30, and lower the interest rate paid by 0.5 percentage point. Another bailout loan, adding 15 billion euros, also looks likely.

For Bloomberg, the arithmetic keeps failing because the politics and economics refuse to play

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