Tuesday 24 October 2017

Every eurozone citizen faces bill for debt crisis

Hamish McRae

Protesters clash with riot police in Athens during a rally against new austerity measures.

THERE is a plan. We don't know the details, nor its likely effectiveness, nor even whether it can indeed be agreed by the politicians. But we can see in outline how the European authorities will seek to cope with a Greek default and yet manage to keep the eurozone intact.

The plan has several elements. Firstly, Greece will be allowed to default on its sovereign debt, with holders getting back perhaps half of the face value of the loans. The rest they lose forever. This may sound shocking but such an outcome has been implicit in the price of Greek debt for several months. So it merely confirms what is already known.

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