Monday, May 23, 2011

The Coming Defaults

An excellent article – as usual - by Irwin Stelzer about the Greek, Portuguese and Irish debt crises in the Wall Street Journal, here.

“… the eurocracy devised a plan for coping with a liquidity crisis when these countries were facing a solvency crisis. Diagnose the disease incorrectly, and the prescribed medicine will make the disease worse by prolonging the period before which a proper diagnosis is developed.”

And conclusion:

“In short, the initial view that we are all in this together, that to save the euro and, indeed, the European Project, everyone must provide support for Club Med and Ireland, is less dominant than it once was. The only serious question is what form the defaults should take.”

This, precisely, is the problem I try to analyze in my book “L’euro: comment s’en débarrasser”.

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