Greece’s Soft Budgets in Hard Times
Having gone through a de facto default on its foreign debt, real problem in Greece is no longer the fiscal deficit, but a combination of deposit flight and continuing excessive consumption in the private sector. As long as inflows of cheap ECB financing continues, the necessary adjustment in consumption will not take place.
https://prosyn.org/saOnRiO
BRUSSELS – The first de facto default of a country classified as “developed” has now taken place, with private international creditors “voluntarily” accepting a “haircut” of more than 50% on their claims on the Greek government. As a result, Greece now owes very little to private foreign creditors.