Will Greece Default? Give me a break… tagged: , , , , , ,

Will Greece Default? Give me a break…

Posted by keeptalkinggreece in Economy

Will Greece  Default? If yes… when?  Or will Greece not Default? The Hamletian question seems to distress not only Greek citizens but -and mainly- financial experts and economic gurus around the globe. Gurus, experts or interests’ representatives, call them what you want, they have heavily started to argue again on the financial situation of the country.  For those not familiar with the term, Default means Failure to meet a financial obligation. In Greece’s case this means going officially bankrupt

Pimco Expect: Greece Will Default In 3 Years

Mohamed El-Erian, chief executive and co-chief investment officer of bond giant Pimco, said he bets Greece will default on its debt in three years.

Greece is likely to default, and it will be to the country’s and the European Union’s benefits, said El-Erian, speaking at the Buttonwood Gathering in New York.

Without an orderly restructuring, he said, Greece’s economy could spiral into a lost decade of high unemployment and low growth as seen in Asia and Latin America in the past.

That is because the fiscal plan imposed by the International Monetary Fund and EU for Greece’s bailout to adjust its debt to GDP ratio will require enormous growth sacrifices, and yet see the country’s debt rise further into the future.  (Full story Wall Street Journal )

Standard & Poor’s Expert: Greece Will Not Default

Deven Sharma, president of Standard & Poor’s, said Greece will not default Monday.

“I do not believe Greece will default,” said Sharma, speaking at The Buttonwood Gathering in New York.

“The design always was for there to be a collective solution” in the European Union, he said.

Regarding the risk of the euro zone’s falling apart, Sharma said monetary leaders have a number of policy choices left.

“There is a lot of desire to keep the euro together from a policy point of view,” he said.

Still, Sharma said the euro currency question will be driven more by the politics of each country.

He said the likelihood of default is higher in more speculative markets and emerging markets with geopolitical risks on the horizon. ( Full story Wall Street Journal )

Rubini: Greece Will Default

The Greek government will not be able to avoid restructuring its debt despite its ongoing austerity drive, eminent American economist Nouriel Roubini told  Greek Kathimerini in an interview on Sunday.

“If you don’t want to call it default or bankruptcy, call it a restructuring under pressure, but it’s going to happen,” said the New York University professor,Chairman & Cofounder of Rubini Global Economics.

Roubini, who has been dubbed “Dr Doom” for his pessimistic economic outlook, has described Greece as “the Lehman Brothers of Europe” – a reference to the US investment bank whose collapse in 2008 triggered turmoil across the global financial markets.

Roubini said the Greek government’s austerity measures – chiefly tax increases and cuts to civil servants’ salaries – had helped to plug a gaping budget deficit but had caused other problems. “As was expected… tax increases and reduced spending have curbed demand and caused gross domestic product to shrink,” he said. (Full story eKathimerini )