Whether it works will be seen in April, when Greece will have to refinance its debt once more.

Worse, the government might be unable to refinance its debt at all, and then would have to cut spending and raise taxes sharply.

The ability to refinance government debt and keep costs down is essential to strengthening public finances and boosting GDP growth.

In addition, to narrow the competitiveness gap, all members should be able to refinance their existing debt at the same interest rate.

The solution is obvious deficit countries must be allowed to refinance the bulk of their debt on the same terms as surplus countries.

The solution is obvious deficit countries must be allowed to refinance the bulk of their debt on the same terms as surplus countries.

Advocates of austerity counter that confidence in the government s credit might collapse, and the government might have to roll over its debt on unfavorable terms. Worse, the government might be unable to refinance its debt at all, and then would have to cut spending and raise taxes sharply.

The higher rates made it more costly for Greece to refinance its debt, creating a fiscal crisis that has forced the government to impose severe austerity measures, leading to public unrest and an economic collapse that has fueled even greater investor skepticism about Greece s ability to service its debt.

The ECB would not be facilitating additional borrowing by member countries it would merely allow them to refinance their debt at a lower cost.

Taxation remains the dominant source of government revenue in most developed countries. But the role of debt finance has been growing and, with it, the need to refinance old debt when total expenditure, including debt service, exceeds total revenue.

Larger firms even those with large debt problems can refinance their excessive liabilities in court or out of court but an unprecedented number of small businesses are going bankrupt.

Any hint that the country may be locked again in parliamentary inertia, as in the final months of Berlusconi s last government, would push the markets to question the credibility of Italy s fiscal consolidation plan, jeopardizing the country s ability to refinance its debt.

And if they habitually decadalized GDP, multiplying the quarterly GDP numbers by 40 instead of four, Greece s debt burden would be 15 . From the standpoint of Greece s ability to pay, such units would be more relevant, since it doesn t have to pay off its debts fully in one year (unless the crisis makes it impossible to refinance current debt).

Italy and Spain would then be able to refinance their debt at close to the ECB s deposit rate, which is currently 1 on mandatory reserves and 25 basis points on excess reserve accounts.

The only means to refinance Greece s debt at an affordable level would be to grant long term, subsidized loans that ultimately would cover a large part of the liabilities coming due in the next 3 5 years.

Its public debt was almost eliminated.

Rising house prices also allowed homeowners to refinance their mortgages, obtaining additional cash to spend on other things.

Had Greece quickly written down its debt burden by two thirds, it would have been able to shed its crushing debt overhang.

Japan, however, stands alone with its massive debt.

CAMBRIDGE Greece will default on its national debt.

Debt relief may help Madagascar protect its biodiversity.

Instead, easy money stimulated the economy by inducing households to refinance their mortgages, and to spend some of their capital.

As a result, its economy would grow, and its debt ratio would fall.

I have proposed a plan that would allow Italy and Spain to refinance their debt by issuing treasury bills at around 1 . I named it in memory of my friend Tomasso Padoa Schioppa, who, as Italy s central banker in the 1990 s, helped to stabilize that country s finances.

Only the United States can indefinitely print its own currency and increase its debt.

Why debt relief now? Liberia obtained its debt write off by initiating profound changes in its governance and economic management in order to provide the institutional capability to manage debt prudently and spend resources wisely in the future.

Currently its debt service status amounts to 115 million annually.

In Lebanon, persisting high levels of public debt forced the Government to direct much of its expenditure towards debt service.

Lower interest rates worked (a little), but for the most part by encouraging households to refinance their mortgages, not by stimulating investment.

This was a profitable model when Spanish banks were able to refinance themselves at a spread much lower than 100 basis points.

Stated differently, now that Greece has achieved a zero primary budget deficit, its debt burden will decline if its nominal growth rate exceeds the average interest that it pays on its government debt.

And it is in America s public debt that the debris of its financial system s broken promises are collected, just as Italy s massive public debt reflects its past national prodigality.

Even an economy with an overall budget deficit will have a declining government debt GDP ratio if the growth rate of its nominal GDP exceeds that of its debt.

That is why it has become so difficult for small and medium sized companies to get new loans or to refinance existing loans.

Obviously, markets still believe that Greece will default on its debt.

LONDON Everyone knows that Greece will default on its external debt.

Japan is a net creditor and largely finances its debt domestically.

In December 2001, the Government declared default on its external debt.

India did its part by writing off the debt owed by African countries under the HIPC Initiative and by restructuring commercial debt.

After all, if a country s debt GDP ratio is to decline without austerity, the interest rate that it pays on its debt must be lower than its GDP growth rate.

If the IMF terminates its current program, Pakistan will be unable to service its foreign debt.

Many local Spanish banks can thus stay afloat only because they refinance a large share of their mortgage book via the European Central Bank.

When the pyramid starts crumbling, government that is, taxpayers must step in to refinance the banking system, revive mortgage markets, and prevent economic collapse.

Many who want to refinance their mortgages still cannot, because they are underwater (owing more on their mortgages than the underlying property is worth).

Meanwhile, the US cannot meet its next debt payment unless Congress and the president reach an agreement to raise the national debt ceiling.