It’s yet another critical weekend for Greece and the Euro, as this piece by Mohamed El-Erian makes clear:
With Greece (as well as Portugal and some other countries) now visibly drowning in a sea of debt, the question is whether the rescuer (EU/IMF) can pull off the rescue or, instead, get pulled down with all parties drowning.
So far, the attempts at rescue-including last Sunday’s dramatic EUR 110 billion announcement-have have been incomplete with respect to both design and implementation. They were thus viewed as insufficient and not credible by analysts and markets.
As a result, the Greek crisis morphed in the following days into something much more sinister for Europe and the global economy.
…Even with this critical uncertainty, we should not under-estimate the historical relevance of what is happening this weekend; and the stakes for Europe and the global economy are huge.
If this rescue attempt does not work, there will be a material acceleration in the process of change to Europe’s economic, financial, and institutional landscape; and the reality of the debt explosion in industrial economies will become even more of a destabilizing factor for the world economy.
More here.
Related posts:
- Thought Experiment: Breaking the Euro
- Weekend Reading: Florida, Las Vegas, California, Greece, Breakfast, etc.
- More Reading: Niall Ferguson, Euro Depression, Nevada, etc.
- Chart of Day: Honey, Greece is Cheap! Wait, Greece is Scary!
- Yo, American Tax-payers, How Do You Feel About Teaming with Germany to Bail Greece?