Σωστές οι διαπιστώσεις και οι ανησυχίες του, αλλά μάταιες πλέον οι ελπίδες του για το ευρώ και την «Ευρωπαϊκή Ένωση» του “Economist” , του πάλαι ποτέ λιμπεραλιστικού περιοδικού, που, όμως, τα τελευταία χρόνια εκφράζει και απηχεί πλήρως την αισχρή διεθνή σοσιαλδημοκρατία και τον ύπουλο αντιαμερικανισμό της:
[Begin with the numbers. Greece’s medium-term debt outlook is darker than either its government or the EU admits. This newspaper’s calculations suggest that even with a fiscal adjustment worth 10% of GDP over the next five years, Greece will either need more official loans for longer than the current rescue package promises or will have to “restructure” its debts (ie, defer payment on some loans or pay back less than it owes). Even on optimistic assumptions, we reckon Greece will need €67 billion or more of long-term official loans in the next few years. Its debt burden will peak at 150% of GDP in 2014, a level exceeded now only by Japan. If growth turns out to be weaker than expected, or Greece fails to cut spending or raise taxes enough, the figures will be a lot worse.
Such a sombre conclusion invites the question of whether this week’s bail-out makes any sense. After all, the history of emerging-market debt crises, especially Argentina’s in 2001, suggests that, if default is overwhelmingly likely, it is better to get it over with rather than put it off with quixotic rescue packages. But this is not true in the Greek case, for two reasons that have less to do with Greece than with the rest of the euro area.
First, a Greek default now would carry a serious risk of triggering debt crises in Portugal, Spain and even Italy, the other euro-area countries suffering from some combination of big budget deficits, poor growth prospects and high debt burdens. The EU does not have the firepower to cope with these.
Second, a default now could also have calamitous effects on the fragile European banking system. Euro-area banks hold €120 billion of exposure to Greece, of which we reckon perhaps €70 billion is Greek sovereign debt. French and German banks account for 40% of the total. Many European banks might well require more government help if they lost a lot on Greek debt. Indeed, the sums involved might easily be greater than the German and French contributions to the Greek rescue loans. And if contagion then pushed Spain and Portugal to a crisis, the entire European banking system could implode.
No time to lose
This prospect is sufficiently worrying to make it right to buy time by providing a bail-out for Greece. But that calculation could change rapidly if the time is not used well—by Greece and, even more, by other euro-area countries.
Greece’s to-do list is now well-known. A country that spent years mismanaging and misreporting its public finances must tighten its belt dramatically for a long time. To boost competitiveness and growth, as well as improve the budget, it must embrace radical tax changes, cuts in public-sector pay and pension reforms. Bold adjustment, which to its credit the new Greek government has already begun, will reduce the risk of Greece finding its debts unpayable in three years’ time.
Even then, it is not hard to see circumstances in which the Greeks might think they would be better off defaulting. So the euro area’s other vulnerable economies must also use the next few years to convince the markets that they are not like Greece. That will also demand fiscal austerity. But even more important are structural reforms to improve competitiveness and boost growth. Without the option of a currency devaluation, countries such as Spain, Portugal and Italy have no alternative but to restrain labour costs and bring in supply-side reforms that raise productivity, especially through the freeing of labour markets. These reforms, long overdue, are now essential. It would be a mistake for the leaders of Spain and Italy to assume that if they got into trouble they might be bailed out like Greece: neither the EU nor the IMF could afford it.
Nor is the to-do list confined to Europe’s southern rim. Germany must help by doing more to boost its domestic demand. Financial regulators everywhere must push banks to clean up their balance-sheets and bolster their capital. The European Central Bank must avoid creating an incentive for banks to load up on Greek debt and then offer it as collateral for liquidity from the ECB, by (controversially) offering less cash for government bonds with lower credit ratings. And governments must start putting in place a mechanism for managing sovereign-debt restructurings within the single-currency zone.
This to-do list is alarmingly long, which is why European politicians are deluding themselves if they think the Greek crisis has been resolved with this week’s rescue. Because Greece was small enough to bail out, they have bought a temporary reprieve. Now they must use the time wisely.]