A Greek debt restructuring: not whether but when?

The Financial Times‘ Martin Wolf makes a strong case here that a restructuring of Greece’s debt is inevitable, and that the only real alternative is for the European Union to finance Greece’s debt indefinitely: That is possible. But it is a political nightmare: the moral hazard involved would be enormous. Greece would lose almost all ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

The Financial Times' Martin Wolf makes a strong case here that a restructuring of Greece's debt is inevitable, and that the only real alternative is for the European Union to finance Greece's debt indefinitely:

The Financial Times‘ Martin Wolf makes a strong case here that a restructuring of Greece’s debt is inevitable, and that the only real alternative is for the European Union to finance Greece’s debt indefinitely:

That is possible. But it is a political nightmare: the moral hazard involved would be enormous. Greece would lose almost all sovereignty indefinitely and resentments would reach boiling point on both sides. Non-European members would also prevent the IMF from offering such indefinite largesse. The burden would then fall on the Europeans. It seems unlikely that needed agreement would be sustained.

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

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