JANUARY 26, 2015 7:26
PM
Paul
Krugman
The New
York Times
How should
we think about the bargaining that may or may not now take place between the
new Greek government and the troika? (No bargaining if the troika basically
says no concessions.) Most discussion is framed in terms of what happens to the
debt. But as both Daniel Davies and James Galbraith point out — with very
different de facto value judgments, but never mind for now — at this point
Greek debt, measured as a stock, is not a very meaningful number. After all,
the great bulk of the debt is now officially held, the interest rate bears
little relationship to market prices, and the interest payments come in part
out of funds lent by the creditors. In a sense the debt is an accounting
fiction; it’s whatever the governments trying to dictate terms to Greece decide
to say it is.