Greece Still Needs a Long-Term Growth Plan

Even by the standards of the sovereign-debt crisis, the provisional agreement reached yesterday by euro-area finance ministers and the International Monetary Fund (IMF) on a second Greek rescue package looks like a messy fudge. It is clear that Greece’s euro-area partners are determined to avoid a near-term euro-area exit, but a long-term solution will require a much more effective growth strategy. (more…)


READ MORE


Euro Area Still in Denial about Failure in Greece

Despite the Greek government’s best efforts, last night’s meeting of euro-area finance ministers failed to approve the release of new funding. We think it’s only a matter of time before Greece gets its money. But the latest delay reflects deep disagreement about how to reduce current unsustainable debt levels. Until the euro area addresses this key issue, caused by the failure of the Greek program, the risk of a disorderly exit from the euro area will remain real. (more…)


READ MORE


ECB Bond Buying Is a Double-Edged Sword

European Central Bank (ECB) president Mario Draghi’s promise to do “whatever it takes to preserve the euro” and create a new bond-purchase program has been positive for market sentiment. But the program also carries real dangers if it breaks the fragile consensus on the board of the ECB and eases the pressure on governments to create a “genuine” economic and monetary union. (more…)


READ MORE