''..Primarily, this is because the current approach of buying time has not failed at all. It has successfully shielded the euro-zone economy from the turmoil at its periphery while providing a framework through which the periphery can adjust. The process has unleashed a wave of pension, labor-market and other structural reforms that almost certainly would not have happened otherwise. The current approach needs to be amended, but not ditched in favor of a "let's get it over with" default..''
''..Greece is making Herculean efforts to adjust. The situation is dire, but Greece still has a chance. The country had no real-estate bubble and does not suffer from excessive private debt. Once the current adjustment recession is over, the Greek economy could snap back to significant growth, altering all calculations about potential debt-to-GDP ratios after 2012. Whether or not Athens will eventually have to restructure its debt is thus an open question, and should be answered only when the outlook for the Greek economy becomes clearer in 2012 or 2013. Of course, lengthening the maturity of official support loans to Greece could make sense if Athens continues to faithfully implement the EU-IMF program. But we would not count this as a default..'' THE WALL STREET JOURNAL
No comments:
Post a Comment