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Monday, November 18, 2013

P. Boone & S. Johnson d/d Apr.6 2010 "Greece And The Fatal Flaw In An IMF Rescue"

Peter Boone and Simon Johnson Apr.6 2010
Two informed realists explain (present tense) 

Their essay ends so
Where next for Greece?
Mr. Trichet understands that Greece’s problems reflect a dangerous flaw in the euro zone system, and the solution will set the tone for behaviour of other members for years to come.  He’ll want his pound of flesh before this is done.  The IMF staff surely understands that Greece’s economic problems are critical, and require drastic actions, but the IMF’s managing director just wants to survive to be elected a new President of France in 2012.
The German population detests providing bailouts to periphery nations, while the debtors of the Euro zone would like the same game to continue a little bit longer.  Meanwhile, the Greeks continue to drag their feet on serious reform while claiming to be “courageous”– presumably they are hoping, magically, that markets will start to want to lend to them again at very low rates in the midst of a fiscal program with little hope for long term success.  It all seems horribly reminiscent to those early days when Argentina slid towards a cruel collapse.

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