Many analysts long ago predicted that Greece would have to default on part of its debt or, as they say in the markets, investors would have to take a “haircut.”1 It looks like they are getting closer to being right.
Greece, the unbearable heaviness of debt
Paolo Manasse, 24 May 2011
External versus domestic debt in the euro crisis
Daniel Gros, 24 May 2011
Does external debt matter in a monetary union? The case of Portugal illustrates the importance of foreign debt. The risk premium on Portuguese public debt rose continuously until the country was forced to turn to the European Financial Stability Facility (EFSF) for emergency financing. But its numbers on the fiscal side are no worse than those of France.
Leveraged buyback: A proposal for the Greek debt overhang
Angelo Baglioni, 21 May 2011
The debate surrounding the debt overhang faced by Greece is focussing on two different types of debt restructuring:
Eurozone design and management failures
Guillermo de la Dehesa, 18 May 2011
The sovereign debt crisis has tested, for the first time in its short existence, the resilience of the Eurozone design, governance, and management, showing some of its weaknesses and failures.
Its design was criticised long before the monetary union was created (European Commission 1990). Many academics pointed to three basic design weaknesses.
The ECB’s three mistakes in the Greek crisis and how to get sovereign debt right in the future
Jeffrey Frankel, 16 May 2011
By now just about everybody agrees that the European bailout of Greece has failed (see for example Darvas et al. 2011). The debt will have to be restructured.
The troika should target the trade and the income balance deficits
Ricardo Cabral, 15 May 2011
Greece, then Ireland, and more recently Portugal have applied for EU and IMF financial aid. A troika of European Commission, ECB, and IMF officials have negotiated accords for ambitious adjustment programmes with either two or three main components, as mandated by the Eurogroup and the Ecofin Ministers (2010a; 2010b; 2011):
Are Michigan and Illinois like Greece and Ireland?
Francis A. Longstaff, Andrew Ang, 10 May 2011
US states are a lot like Eurozone nations.
Managing a fragile Eurozone
Paul De Grauwe, 10 May 2011
A monetary union is more than just a single currency and a single central bank. Countries that join a monetary union lose more than one instrument of economic policy. They lose their capacity to issue debt in a currency over which they have full control.
The R word
Charles Wyplosz, 29 April 2011
Rumours circulate widely these days. European policymakers talk about a restructuring of public debts in some countries (see for example Portes 2011). Rumours may be unfounded but they are telling of what people think about.
Sovereign Default Risk and Bank Fragility in Financially Integrated Economies
Olivier Jeanne, Patrick Bolton, 25 April 2011
- Secular stagnation: Facts, causes, and cures – a new Vox eBookTeulings, Baldwin
- Can large primary surpluses solve Europe’s debt problem?Eichengreen, Panizza
- The unrecognised benefits of grade inflationBoleslavsky, Cotton
- The US manufacturing base is surprisingly strongMoran, Oldenski
- Long-term damage of the US court’s Argentinian debt rulingFrankel
- A tale of two depressions: What do the new data tell us? February 2010 updateEichengreen, O’Rourke
- Educated in America: College graduates and high school dropoutsHeckman, LaFontaine
- Eurozone breakup would trigger the mother of all financial crisesEichengreen
- Panic-driven austerity in the Eurozone and its implicationsDe Grauwe, Ji
- Debt, deleveraging, and the liquidity trap: A new modelKrugman
CEPR Policy Research
- The buyer margins of firms' exportsCarballo, Ottaviano, Volpe
- Commodity and Equity Markets: Some Stylized Facts from a Copula ApproachDelatte, Lopez
- Ethnic Unemployment Rates and Frictional MarketsGobillon, Rupert, Wasmer
- Finance and Poverty: Evidence from IndiaAyyagari, Beck, Hoseini
- The Manipulation of Basel Risk-WeightsMariathasan, Merrouche
- The economics of Scottish independence in an interdependent worldHughes Hallett
- Making city lights shine brighterYusuf, Leipziger
- The euro in the 'currency war'Bénassy-Quéré, Martin
- The roots of shadow bankingPerotti
- What’s wrong with Europe?Baldini, Manasse