Germany’s rejection of the Greek extension plan this morning, is an opportunity for Greece to truly restructure. In order to find a way out of the endless web of debt now entrapping the world, pragmatists must start with a simple admission that much of the debt that has been advanced the past decade can never be repaid, and that write-offs and a severing of credit lines are the first steps to meaningful recovery.
Hans-Werner Sinn, president of the Munich-based Ifo Institute for Economic Research, said Greece’s creditors needed to “face the truth” and realize the country is bankrupt and needs to undergo a devaluation in order to regain competitiveness.
“Going to the drachma is the only possibility I believe, because then the economy will be revitalized rather quickly,” Sinn, president of the Munich-based Ifo Institute for Economic Research, told CNBC Thursday.
“We have to accept that as creditors and face the truth and reduce the burden to the Greek people,” he added. Here is a direct video link.