The bond market’s dance over European debt will not last forever - FT.com
The implied surpluses are mind-boggling. Under reasonable assumptions about growth rates and interest rates, the average annual primary surplus for the decade ending in 2030 would exceed 4 per cent for Spain, 5 per cent for Ireland, Italy and Portugal, and 7 per cent for Greece. Put simply, no country can run such monumental surpluses for such extended periods without inciting a taxpayer revolt.....
But sadly growth cannot be conjured up out of thin air.
European policy makers have shown an inability to conjure it up any other way.The other alternative is debt restructuring. European officials continue to dance around the idea of writing down public debt, promising Greece lower interest rates and longer maturities but denying the need for more fundamental restructuring and for applying such measures more widely. The events of recent weeks make clear that they will not be able to dance much longer.