June 30, 2011
The Washington Post should have made this point in an article that noted that Greece is likely to face further problems in meeting its debt obligations. If Greece ultimately has to restructure (i.e. partially default) on its debt, then it means that the new money being put in by the IMF and the EU is effectively allowing current debtors to be repaid. The public lenders will then be the victims of the partial default. Rather than being loans to the Greece, these loans are effectively a transfer from the taxpayers who support these institutions to Greece’s creditors. The article should have made this obvious point.
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