Why is the Greek debt crisis lasting so long? Six years and no foreseeable end in sight.
Different cycles influence a country’s economy: the business cycle, the credit cycle, the regulatory cycle, the moral cycle. One that is seldom talked about is the debtor-creditor cycle. George Soros deftly describes the relationship between creditors and debtors as “the collective system of lending” in Alchemy of Finance.
In Greece’s case this cycle is of particular importance, as Greece needs a significant debt haircut in order for the economic cycle to restart. While that is not the only prerequisite, it is still essential.
The drama that has been playing out between Brussels and Athens is part of the debtor-creditor cycle, the various phases of which can be broadly summarised as follows:
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