February 13, 2012

Why Greece and Portugal Should Go Bankrupt

Wolfgang Munchau, Financial Times

AP Photo

Two years ago, most European policymakers still believed that Greece would pull through. They lacked experience in managing financial crises. They did not even consult with policymakers in other parts of the world who had dealt with crises in previous decades. Armed with ignorance and arrogance, they ended up repeating everyone else’s mistakes. They thought they were clever when they came up with the idea of an expansionary fiscal contraction. And they thought that a voluntary private sector involvement (PSI) could really help.

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TAGGED: Greece, Portugal, Eurozone


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The agreement came after days of drama and delay. In the end, Greek political leaders finally acceded to tough new austerity measures in exchange for more bailout loans. But no one was celebrating. more ››
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