The Telegraph (May 22)
Half the world thinks Greece should restructure its debt. The other half doesn’t. Prime Minister George Papandreou has come down firmly against any debt restructuring, but Greek citizens may think otherwise. Continued belt tightening could risk “further civil unrest. A poll published on Sunday showed 80pc of Greeks would refuse to make any further sacrifices to ensure continued EU and IMF support for the bail-out.”
Tags: Civil unrest, Debt, Greece, Restructuring, Sacrifice
New York Times (May 13)
A year after Europe’s leaders put together a $140 billion bailout packaged for Greece, they are now expected to propose “a further $86 billion dose of the same failed medicine.” They shouldn’t. Delaying the inevitable simply inflates the final bill. Greek debt needs to be restructured. “The longer Europe’s leaders hide from this fact, the bigger the eventual bill will be, and the longer Greeks will have to wait for renewed growth.”
Tags: Debt, Europe, Greece, Restructuring
Economist (May 12)
“If the stakes were not so high, Europeans’ incompetence in the euro-zone debt crisis would be comic.” A year after the Greek rescue began, there is still no end in sight. A new plan is long overdue, but instead “Europeans are bickering like children in a playground.” Call it what you will, it is time for a reprofiling or orderly debt restructuring.
“If the stakes were not so high, Europeans’ incompetence in the euro-zone debt crisis would be comic.” A year after the Greek rescue began, there is still no end in sight. A new plan is long overdue, but instead “Europeans are bickering like children in a playground.” Call it what you will, it is time for a reprofiling or orderly debt restructuring.
Tags: Debt, EU, Greece, Restructuring
Financial Times (January 27)
Japan is not facing the “dreadful dream” envisioned by Kaoru Yosano. Nor is S&P’s downgrade of Japan’s credit rating the next chapter in the global credit crisis. “Rather than a ‘dreadful dream’, Japan’s leaders face an enticing reality. They have the opportunity to issue more and more bonds at the lowest interest rates seen since the Babylonians invented accounting.”
New York Times (January 27)
Standard & Poor’s downgraded Japan’s debt from AA to AA-. No one is expecting an immediate crisis. Most of Japan’s debt is held domestically. Still the amount of debt is stupefying and there are troubling fundamentals. The Times writes, “The Japanese economy was tipped into a painful recession by the global financial crisis, and has only managed a very feeble recovery.” Deflation is jeopardizing this, as is “a rapidly aging population.” Japan’s greying population is also “raising the likelihood of ever-increasing social security and pension obligations.”
Standard & Poor’s downgraded Japan’s debt from AA to AA-. No one is expecting an immediate crisis. Most of Japan’s debt is held domestically. Still the amount of debt is stupefying and there are troubling fundamentals. The Times writes, “The Japanese economy was tipped into a painful recession by the global financial crisis, and has only managed a very feeble recovery.” Deflation is jeopardizing this, as is “a rapidly aging population.” Japan’s greying populaiton is also “raising the likelihood of ever-increasing social security and pension obligations.”
Financial Times (December 17)
With preliminary agreement on a permanent crisis mechanism, the EU has finally moved “to avoid future crises.” The permanent mechanism is not quite a done deal. The pact would take effect in 2013, following approval by EU leaders in March and then by the EU’s 27 member states. In the meantime, however, market concern remains centered on the ability of EU states and banks to attain adequate debt financing, a potentially explosive issue the EU has continued to dodge. The Financial Times believes these immediate concerns must now be addressed. “Europe will only be able to enjoy tomorrow if it first deals with the problems of today.”
Tags: Banks, Crisis mechanism, Debt, EU
Washington Post (November 26)
Sheila Bair fears the next big crisis will start in Washington. The “explosive growth in federal borrowing” is the cause of the FDIC Chairman’s fears. “Federal debt has doubled in the past seven years, to almost $14 trillion” or 62% of GDP. That means each American household shoulders over $100,000 in federal debt. Bair says the deficit needs to be cut before the U.S. wakes up to a new crisis.
Boston Globe (September 28)
Harvard is still reeling from the recession. When its endowment plunged in value, the university doubled its debt load to fund operations. Harvard’s debt soared to $6 billion over the past 3 years. According to the Globe, “Harvard is maxed out on debt for the foreseeable future. In order for the university to keep its AAA bond rating, its usual way of financing buildings, borrowing from investors, is effectively off the table.” Projects, such as the $1.4 billion Allston science facility project, are now being halted as Harvard look for ways to cut costs.
