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HomeGreek ‘Drama’ Only in First Act, or ‘Beware of Greeks Bearing Gifts’
Posted by Larry Doyle on April 6th, 2010 1:42 PM |
Prior reports that Greece’s financial problems are now in the rear view mirror are exceedingly premature.
As we navigate ‘across the pond,’ we learn that the Financial Times’ Wolfgang Munchau believes Greece Is Going to Default but Not This Year:
Greece will not only have to make an extremely large public sector deficit reduction effort but it will also have to do this under a condition of disinflation, and possibly deflation, which would push its nominal growth rate to negative levels during the adjustment period. That, in turn, would jeopardise the debt reduction programme of both the public and private sectors. Under those circumstances, there is no way that Greece could ever stabilise its debt-to-gross domestic product ratio, no matter how hard the government of George Papandreou tries.
To get out of this mess, one of five things will have to happen. (more…)
Tags: a run on the banks in Greece, beware of greeks bearing gifts, Boston Latin School, EU, fall of the Euro, Financial times Wolfgang Munchau, fiscal deficit in Greece, George Papaconstantinou, George Papandreou, Greece, Greece debt to GDP ratio, Greece is Going to default but Not This Year, Greece Spain Portugal, Greek bonds, Greek deficit, Greek drama, IMF bailout of Greece, options to fund Greek deficit, timeo danaos et dona ferentes, Wolfgang Munchau
Posted in General, Greece | 4 Comments »
