In which Jim O’Neill says muddling through leads to deepening crisis
Muddling through means deepening crisis for the euro zone.
Firstly, given hardly anyone still believes Greece can avoid a major debt restructuring, it would be better to get it over and done with… By offering a decisive restructuring, agreed and recognised by key European and G20 policymakers, this would show eurozone leaders were finally facing up to reality.
Secondly, policymakers need to agree to a framework for the adequate recapitalisation of Europe’s banking system. If there is going to be a successful debt restructuring for Greece, with minimum adverse contagion effects, this will be vital…
Thirdly, leaders must make clear that while Greece has a solvency challenge, the bigger economies of Italy and Spain only have problems with liquidity…
Lastly, and perhaps most importantly, all the key eurozone policymakers have to show that that they are on the same page.
That is it, exactly. Listen to Jim O’Neill. Muddling through means deepening crisis for the euro zone.
Source: Eurozone leaders must stop trying to “muddle through” the crisis | The A-List | FT.com