Friday, July 15, 2011
Cavallo on Greece
Some have likened Greece's situation today to Argentina's in 2001, when, after repeated austerity "cures" failed, it ultimately was forced off its peg to the dollar and suffered a severe crisis, but a floating currency ultimately facilitated a recovery. In a Vox column, former Argentine finance minister Domingo Cavallo offers some reflections on Argentina's experience and what it suggests for Greece. Unfortunately for them, he says "Greece’s crisis is much more difficult to manage than the 2001 Argentinean crisis." (Yikes!!). He offers some suggestions on how the debt restructuring should be done (and I think everyone who isn't a European government official sees that it needs to be done), but doesn't think Greece should leave the Euro.