Europe’s High-Risk Gamble
The markets are fully aware that Greece, being insolvent, will eventually default. Why, then, are political leaders in France and Germany trying so hard to prevent – or, more accurately, to postpone – the inevitable?
https://prosyn.org/qbHdSxf
CAMBRIDGE – The Greek government needs to escape from an otherwise impossible situation. It has an unmanageable level of government debt (150% of GDP, rising this year by ten percentage points), a collapsing economy (with GDP down by more than 7% this year, pushing the unemployment rate up to 16%), a chronic balance-of-payments deficit (now at 8% of GDP), and insolvent banks that are rapidly losing deposits.