Both Greece and its creditors must compromise to prevent the risk of a Grexit

Greece and its creditors have been engaged in a two-month standoff over the release of further financial assistance to the country. Lorenzo Codogno and Paul De Grauwe write that with no agreement yet reached, the possibility of Greece leaving the euro has now become real. They argue that the only solution to the crisis is for both sides to compromise, with the Greek government accepting deep supply-side reforms, and Eurozone policymakers offering Greece a fair deal on the demand-side.