At the time of the first Greek bail-out in May 2010, several commentators felt that there should have been a default, haircut, PSI, roll-your-own euphemism. It seems this view was shared at the IMF but not at the ECB and not by EU decision-makers so extend-and-pretend won the day. That deal has come unstuck, as predicted. This story in today’s Sunday Telegraph looks like it has decent sources:
The debt sustainainability analysis in the last IMF report on Greece looked like a triumph of hope over experience. The Telegraph is reporting new troika calculations that Greece faces, in 2020, and after a large haircut, a second bailout and eight further years of austerity, an exit debt ratio of 129% of GDP.
The Bundesfinanzministerium, according to the paper, is preparing for an endgame earlier than 2020. Perhaps they have seen Becket’s play:
‘Ever tried. Ever failed. No matter. Try Again. Fail again. Fail better.’