February 13, 2017

Greek Debt Crisis - Nothing has changed

Going to the other extreme, the Greek debt crisis seems to be raising its ugly head once again for the umpteenth time since 2010. Recently the International Monetary Fund has suggested that a looming "debt Armageddon" potentially could pose a risk to the broader euro-zone. The German finance minister, of course, stated the country would need to leave the European Union to get a debt haircut.

This Mexican standoff was old years ago, but still has the potential to cause volatility in the euro-zone. The Germans will continue to "extend and pretend" on the Greek debt rather than provide any sort of debt forgiveness, which would be hard politically. 

The Greeks, on the other hand, continue to refuse to make the necessary labor and other structural reforms needed to make their economy competitive. Unfortunately, I don't see either side changing their stance.