It’s still too early, today, to see any details reported on the restructuring deal for Greece.
That’s not a big surprise.
But what has amazed me is how, over the past week and more, the mainstream media has focussed on an apparent U-turn by the government in Athens (on austerity and reform) - and not on the news that European politicians were now talking about the prospect of restructuring (or a cut in debt).
“Debt Relief is the Number One priority” Yanis Varoufakis wrote to me at the weekend.
And that’s what he’s been saying all along, after all.
He pointed me towards this article of his. Another follows in Die Zeit on Thursday. He said he’d publish the Greek government proposals, including on debt, today - but I can’t see them so far.
Everything since the winter election has been working towards this moment : Greece running out of cash, and being able to demand of its partners a cut in debt, or disaster for all otherwise.
As I say the details of that aren’t available as I write, and who knows what restructuring will be eventually wrangled from now on…
(I suspect Yanis will be very happy to have left the next bout of horse-trading behind!)
…And the restructuring may not look like a cut in debt at all.
But any stringing-out of payments will represent a win for Athens on its key demand.
It’s just as though you lent a tenner to someone who promised to give it back to you by Friday. But Friday comes, and your friend asks for another week to pay it back, maybe with less interest - and by the way - could they borrow another fiver in the meanwhile?…
…You at least take on the opportunity cost of what you could have done with that tenner in that extra week.
It seems likely to me that European negotiators have been heavily playing down the restructuring part of this latest deal.
The path towards restructuring, if it happens, and whatever form it takes, was eased by several announcements in recent weeks. Like from Donald Tusk, the European Commission President (“realistic proposals will have to be matched by the restructuring of debt”), the US Treasury Secretary Jacob Lew, and most key of all, the IMF.
On the one hand, the IMF is replete with nations who have been denied such generous relief, and who have been complaining about the feather-bedding of a First World nation. On the other hand, a number of its members have seen debt forgiven, not least as part of the Millennium Goals process, and the Paris Club.
What Greece badly needs, as does its partners, is reform.
I wore an ironic grimace when it was announced that the previous Prime Minister had just won a vote, last winter, to (among other things) allow large companies to announce job cuts without consulting with a government minister first. That was a rule which led to delay, political horse-trading, and often the destruction of the company concerned in the process.
Why hadn’t that law been passed six or seven years before that? Syriza may have put that rule change on hold, again, but previous governments had dragged their feet aplenty.
But punishing ordinary Greeks with a debt burden which cannot be shifted, and which hobbles economic recovery is unfair and counter-productive. Other countries with debts run up by kleptocrats or badly-motivated lenders have had their sins forgiven.
Private bondholders took a haircut on their lending to Greece in 2012. Public institutions, and the taxpayers that back them, will probably be asked to follow suit now.
The above was written very early on Monday morning, and although I use the word "haircut" - explicitly ruled out by European leaders - I'm still confident that substantial restructuring will occur, in some form - either with Greece inside or outside the Eurozone...
...by Tuesday night, I'm backed up by the release of an IMF report that was handed to those same European leaders over the weekend. Yanis might have known about its detail. It includes the words :
""Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far."
There we go!