We must face up to reality of debt crisis
Published 30/06/2011 | 05:00
THE Greeks have a phrase for it: between Scylla and Charybdis. In the case of modern Greece, the choice is between the piling on of more debt, which hardly anyone believes the country can support, and rejecting the loans and immediately running out of money -- a prospect the governor of the Bank of Greece called "economic suicide".
A shrewd Athens parliamentarian -- which probably means most of them -- might think this not such a difficult choice at all. Everyone now thinks the EU strategy will have to change. It is not just a Greek chorus of economists chanting doom; the governor of the Bank of England, and the leading central banks' own organisation, have both said the present EU/IMF policy is not credible.
If it is going to have to change to something better, it makes sense for Greece to wait. The danger, as yesterday's scenes show, is that Greece may not be able to do so for much longer.