A new beginning for Greece and Europe

Greece has choices to make to resolve its crippling debt problems but the entire eurozone also needs fiscal and structural co-ordination if it is to prosper, writes Dennis Snower

Greece is in urgent need of clear thinking. The only reason the country has not long since defaulted on its debts is that the European Central Bank continues to provide funds to the Greek central bank through its emergency liquidity assistance (ELA) scheme.

The Greek central bank, in turn, lends money to the country’s commercial banks, which lend it to Greek citizens and foreign creditors. The problem is that both groups of borrowers have been transferring large sums of money to other countries.