It is surely clear to all sides by now – if rarely admitted – that Greece will never fully repay its bailout loans. The current approach requires Greece to run a large and protracted budget surplus to satisfy its creditors’ demands. This will force it to drain itself of demand for a generation or more, in order to transfer to other countries huge amounts of what the Greek people produce. History and economic principles teach us that trying to enforce such reparations-style logic on a heavily damaged economy will only serve to destroy it and harm the intended recipients too. It is time to end the pretence, and for ... (full story)