The Eurozone’s Narrowing Window
Without robust growth, and because perpetual austerity is not politically tenable, Europe’s options are narrowing. So much now hangs on the ECB’s actions – but for how long will these be sufficient to maintain a truce with markets?
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PRINCETON – Portuguese authorities recently made a preemptive offer to their country’s creditors: Instead of redeeming bonds maturing in September 2013, the government would stretch its repayment commitment out to October 2015. The deal was concluded on October 3, and has been interpreted as a successful market test for Portugal. Ireland’s authorities have conducted similar recent operations, exchanging short-maturity paper for longer-term debt.