Debt re-scheduling

The process of extending the repayment schedule, attached to one or all of the financing arrangements entered into, by a company or public sector entity. – By comparison, restructuring usually has a deeper impact, such as the total or partial write-off of some debt). Debt restructuring is mainly carried out by granting longer repayment periods, sometimes also by lowering interest rates. – In the course of the Greek crisis in particular, the advantages and disadvantages of debt restructuring for debtor countries were discussed in detail. The unanimous result of these considerations is that – the state in question must bring public revenues into balance with expenditures as quickly and sustainably as possible, and – the competitiveness of the economy must be strengthened. If these two conditions are not met, debt restructuring hardly seems promising. On the contrary, it leads to a reduction in the pressure for economic adjustment. – In the euro area, this must also be backed up by a corresponding degree of responsibility on the part of the government as well as the population of the debtor country concerned vis-à-vis EMU. In wide circles of euro area citizens, however, there are doubts as to whether such an attitude exists, especially in the case of Greece. There seems to be a ludicrous belief in Greece that its own difficulties are not home-grown but are the fault of others, especially Germany and the Netherlands. – See bail-out, ClubMed, expropriation, cold, substitute bond, Finland, consolidation, loan officer, London Club, London Debt Conference, Prague Proclamation, debt repayment mechanism, independent, sovereign debt, denied, Stability and Growth Pact, redemption, debt rescheduling clauses, forced expropriation.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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