The latest deal on Greece has been accompanied by much of the usual and expected commentary — ‘this isn’t a solution, it’s just kicking the can down the road’.

The same bemoaning has been present at each and every step of the Eurozone crisis over the past five years.

And — putting my cards firmly on the table face up — I’ve been guilty of this myself on more than one occasion.

But is it a fair criticism? Is ‘kicking the can further down the road’ really such a bad strategy?

If the alternatives are a messy Greek exit from the Eurozone or the crystallisation of huge (and politically toxic) losses for other European states , then I’m really not sure it is.

Another way of thinking about ‘kicking the can down the road’ is ‘buying time’ . And time is one of the most precious of macroeconomic commodities. Given enough time, and the magic of growth, almost anything becomes possible

Greece’s government debt stands at around 175% of GDP. That is, there is no disputing it, very high indeed. But concentrating on the level of debt is not necessarily the most meaningful way to think about it.

A debt of £10,000 with an interest rate of 20% would mean annual debt servicing of £2,000. That is a much higher burden than a debt of £20,000 with an interest rate of 5%.

In many ways, when considering the case of Greece, the most economically meaningful number isn’t the level of debt to GDP, but the cost of servicing that debt measured against GDP i.e. how much of the Greek national income is being swallowed up in servicing debt?

That is a better measure of the burden of debt than simply looking at the headline numbers. The results of this analysis are somewhat surprising. In 2014, government debt servicing costs in Greece were just 2.6% of GDP. That’s considerably lower than Portugal (5.0%) or Italy (4.7%) and not that much higher than Germany (1.9%).

Measured as share of tax revenues, Greek government interest payments are now lower than when Greece joined the Euro.

Usually, if a country’s level of debt was very high then many would still be worried; even if the cost of servicing that debt was very low. The fear is that debt costs may rise in the future. To go back to the example used above; £10,000 at 20% is a higher annual burden than £20,000 at 5% — but what if the rate on that £20,000 goes to 11%? A higher level of debt means more danger if borrowing costs spike.

In the case of Greece though, the situation is different. The bulk of the debt is now owed not to market players who may demand a higher price for the risks they are running but to official bodies and Eurozone governments. Which should provide some insulation against this risk.

All of which means that Europe and Greece can afford to take their time in dealing with Greece’s debt. Of course historically, such high debt levels are not reduced by lower tighter fiscal policy or economic growth alone.

All the talk of how Germany’s debts were written off provides an example which is interesting but unlikely to be repeated. It’s simply a stretch to far.

A better example of how to reduce a high debt burden is the UK. As Reinhart & Sbrancia have written one big driving of lower debt/GDP ratios in advanced economies, like the UK, after the Second World War was ‘financial repression’.

Financial repression includes directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks.

In the UK between 1945 and 1980,Reinhart & Sbrancia estimate that such ‘repression’ reduced the debt burden by an average of 3 to 4% per year.

‘Financial repression’ is if anything an easier option when the debt is mainly owned to official creditors rather than domestic financial institutions.

If the official sector lenders are prepared to keep nominal interests rates low — and if (and this is the big if) Greek inflation can turn positive again and rise above the nominal borrowing rates, then not only will the debt not be a huge annual burden but it’s level will be whittled down over time.

Greece would have its debt ‘restructuring’ and (thanks to money illusion) the European creditors would not have to acknowledge a write down.

Of course getting Greek inflation to turn positive again is the challenge. Aa looser fiscal policy should help by providing a boost to demand.

None of the above should be taken as a defence of Eurozone or Greek policy over the last decade and half.

The current bailout programme has created — as Syriza argue — a ‘humanitarian crisis’ in Greece, with unemployment above 25% and youth unemployment above 50%. Greece running (on the IMF numbers) a structural deficit of almost 8% of GDP as early as 2006 was hardly helped.

But, if the politics can be made to work and if trust can be restored, then a lower primary surplus, a jointly agreed reform programme and the impact of Eurozone QE can all be allowed to play out and if Greek inflation rises again, then a few years down the road things will look a lot better.

Greek Inflation (Source IMF)

The costs to Greece of the past five years have been enormous, neither Greece nor the creditors have covered themselves in policy making glory. Faced with an ill designed currency union the costs of the shock that hit between 2008 and 2010 was always going to have been high. Imposing extreme austerity on an economy hit by a lack of demand exacerbated that crisis. But a policy of ‘I wouldn’t start from here’ isn’t a real policy. ‘Kicking the can down the road’ was probably a lot better than the alternatives.