QUESTION:
Marty,
I lived in Greece for 3 years while in the US Air Force. I fell in LOVE with the country, the people and the food! I want nothing but the best for this country. If you were given the floor in front of PM Alexis Tsipras, what steps would you suggest that he take to get out of the mess that Greece is in right now?
Sincerely,
MM
ANSWER: I would immediately suspend all debt payments. I would do a debt-to-private equity swap but the ratio should be about a 50% haircut on the debt. The exact number should be no greater than where the debt to drachma stood in 1998, and all interest should be applied to principle.
The debt-to-private equity swap would cause capital to be repatriated to Greece and you will see small businesses develop. The smartest have been leaving Greece to find jobs. They need to be attracted back. Eliminate all taxation and cut government expenditure by reducing regulation and size. The swap to private equity will create new businesses and that will create jobs for the displaced government workers.
Do this to start and you will see Greece boom and its stock market will rise, just as the USA did out of 1932. It is time to start focusing on the people rather than only the bondholders.
