Prof Philip Booth comments on the proposed solutions to the crisis
“The IMF and the EU still has not woken up to the realities of the sovereign debt situation. Simply developing new means for pan-European institutions to borrow more money or parcelling up the debts into packages that are ultimately passed round to other countries or to the ECB is not a solution.
“It is to be welcomed that the EU and the IMF have eventually understood the realities of the Greek situation, but they are a long way from appreciating that the sovereign debt crisis more generally cannot be solved by printing more money or inventing clever financial instruments in ever-more opaque institutions. Ultimately, investors will have to bear real losses because countries have borrowed money that they cannot repay. The IMF and the EU should be considering how to manage this problem in an orderly fashion.”
Notes to Editors
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