Financial Journalist Martin Wolf writing in the Financial Times stated that the package agreed on Sunday “is overtly a rescue of Greece, but covertly a bail-out of banks.”
“Greece is being asked to do what Latin America did in the 1980s. That led to a lost decade, the beneficiaries being foreign creditors. Moreover, as creditors are now paid to escape, who will replace them? This package will surely fail to return Greece to the market, on manageable terms, in a few years. More money will be needed if debt restructuring is unwisely ruled out.
For other eurozone members, the programme prevents an immediate shock to fragile financial systems: it is overtly a rescue of Greece, but covertly a bail-out of banks. But it is far from clear that it will help other members now in the firing line. Investors could well conclude that the scale of the package required for tiny Greece and the overwhelming difficulty of agreeing and ratifying it, particularly in Germany, suggest that further such packages are going to be elusive.”
To Read these articles in full go to:
Irish Left Review: http://www.irishleftreview.org/2010/05/05/greece-asked-latin-america-1980s
Financial Times: http://www.ft.com/cms/s/0/de21becc-57af-11df-855b-00144feab49a.html?nclick_check=1