New York Times (April 17)
“If one country defaults on its loans, it’s a big problem for its citizens. If a dozen countries default, it’s a big problem for the world.” Nearing the “verge of yet another debt crisis,” world leaders can still act to prevent it. “They should dust off the tool kit that helped end the Latin American debt crisis, especially the measures that convinced creditors to share the pain and accept less than what they were owed.”
Tags: Citizens, Creditors, Debt crisis, Defaults, Latin American, Leaders, Loans, Owed, Pain, Prevent, Tool kit, Verge
Bangkok Post (September 2)
“Many developing countries are teetering on the edge of a debt crisis, with the Covid-19 pandemic, soaring food and energy costs, and the monetary tightening of major economies all threatening to push them over.” Lebanon, Sri Lanka and some other countries have already teetered. “As of the end of March, 38 of 69 low-income countries were either already in or at high risk of debt distress. Middle-income developing countries’ debt-service burden is at its highest level in 30 years.”
Tags: COVID-19, Debt crisis, Developing countries, Distress, Energy costs, Food, High-risk, Lebanon, Low income, Major economies, Middle-income, Monetary tightening, Pandemic, Soaring, Sri Lanka, Teetering, Threatening
Wall Street Journal (May 3)
“In a year filled with European elections, no one wants another debt crisis—even if this requires pretending that Greek politicians will implement pro-growth reforms they’ve repeatedly shunned.” To reach a tentative agreement, “Athens has agreed to make certain reforms in exchange for an approximately €7 billion disbursement from a 2015 bailout package so Greece can meet July debt repayments.” Once again, the can is kicked a little further down the road. “The one certainty is that Greece and its creditors will be back at the same stand a year from now.”
Tags: Bailout, Creditors, Debt crisis, Elections, Europe, Greece, Pretending, Reforms, Repayments
Wall Street Journal (July 29)
“Abenomics represents the best—and possibly the last—chance for Japan to avert a debt crisis that could set back the global recovery once more.” Around the world, everybody should hope for the success of Abenomics. If it does, “then the world’s third-biggest economy could re-emerge as a major engine of growth at a time when Europe is stagnant and China is slowing. If it fails, then Japan’s Mount Fuji of government debt could come tumbling down, sending shock waves through the global economy.”
Tags: Abenomics, China, Debt crisis, Economy, Europe, Global recovery, Growth engine, Japan, Slowing
Euromoney (May Issue)
“The Cyprus solution is inadequate as well as sending the wrong messages on depositors’ risks and free capital flows. Then there’s Slovenia…and Italy….. So the euro debt crisis is not over….. Markets are far too sanguine about the outcomes.”
Tags: Banks, Cyprus, Debt crisis, Depositors, EU, euro, Free capital flows, Markets, Outcomes, Risks
Financial Times (April 7, 2013)
“After 20 years of hesitation Japan has stepped on to the economic tightrope. To do so is bold and necessary.” A decade earlier, the effectiveness of Abenomics would have been more certain. “As the years passed, the path that Japan must walk has narrowed, with continued deflation on one side or debt crisis on the other. That is no reason not to try. Disaster is otherwise inevitable, which is why the BOJ’s past reluctance to act was so infuriating. But there is no margin for error.”
Financial Times (February 1)
“Europe enjoyed the first month of 2013 in a mood of relative optimism – a relief after years where one financial near-death experience followed the other. The fissile market pressures on the eurozone are slowly going into reverse, with private money leaving havens and returning to the periphery. Yet clouds continue to clump over the region’s banks. Even if the debt crisis gradually abates, Europe is far from done with cleaning up its banking system.”
Tags: Banks, Debt crisis, Europe, eurozone, Optimism
Financial Times (November 16)
“This week, the consequences of the eurozone’s misguided policies were brought home to the politicians overseeing them.” Millions of workers went on strike just as the area fell back into recession. “The eurozone theology of austerity by all is doing its predictable beggar-thy-neighbour work…. This economic and political damage was caused by a wrong-headed morality tale that attributed the debt crisis to fiscal indiscipline, when in reality profligacy was a sin most promiscuously practised by private lenders and borrowers.”
Tags: Debt crisis, Economy, eurozone, Recession, Strike
Financial Times (December 22)
Moscow will “resume old habits and exploit Europe’s debt-driven disunity.” Despite the economic crisis, the EU must form a united foreign policy front and “seek a constructive relationship with its neighbour. But it should do so without deluding itself about the prospects for Russian reform after Mr Putin’s return to the presidency.”
Tags: Debt crisis, EU, Foreign policy, Moscow, Putin, Russia
Wall Street Journal (August 16)
This time European leaders struck “a novel idea: Restore investor confidence by denying investors crucial price information.” Novel, but ineffective. Like many of the half-measures before the new bans on short-selling will not fix the European debt crisis. “Someday economic historians will describe Europe’s reaction to its current fiscal woes as a case study in avoiding the real problem. In the latest episode, regulators in France, Italy, Belgium and Spain decided late last week to stop the decline of European bank shares by imposing a short-selling ban on financial stocks for at least 15 days.”
Tags: Debt crisis, Europe, Investors, Short-selling
