By Hugo Dixon
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
DAVOS, Switzerland -- The euro zone crisis may be close to resolution. There is certainly optimism among policymakers at the World Economic Forum in Davos that a comprehensive deal -- involving more discipline by peripheral nations and more help from rich nations -- could be put together in coming weeks. If so, the hot phase of the crisis could be over and even Greece would have a fighting chance of getting out of the woods.
There is still no deal. But the stars seem to be coming into alignment. Germany, the zone's paymaster, clearly realises that it has a strong interest in the single currency holding together -- and will do what is needed to make that happen. Peripheral nations also seem to be willing to go an extra mile to give Berlin enough air cover to sell further help to the German people.
The basic bargain would involve more generous terms for loans to indebted countries, especially Greece, balanced by hard-and-fast promises not to run up debts in the future. The countries are discussing some form of "debt brake", a provision embedded in the German constitution which forces it to balance its budget in the medium term. Such self-denial could, indeed, be a healthy mechanism for all countries to adopt.
Meanwhile, two changes could be made to make even Greece's debt burden -- which is officially forecast to peak at just under 160 percent of GDP -- more bearable. The first would be to buy back chunks of its debt in the secondary market at a discount and pass the benefit onto Athens. If, say, a quarter of its debt could be acquired at a 20 percent discount, the peak ratio would fall by 8 percentage points. Not huge, but helpful. More importantly is the idea of cutting the interest rate on the debt. If the country was able to fund itself at below 5 percent, the annual interest payment would be below 8 percent of GDP.