Financial Times
May 22, 2011
Qu’est-ce que l’Histoire, sinon une fable sur laquelle tout le monde est d’ accord?
Napoleon Bonaparte
In the case of the forthcoming Greek def . . . restructuring, everyone is trying to agree on what the fable will be before it becomes history. There are two ways to look at this unseemly argument over a cover story to tell the bond police: 1) empty political posturing; and 2) attempts by the speechifying and leaking officials to stick less favoured parties with the charge.
The most telling commentary on the eurozone leadership in the past couple of weeks came in the form of the new, studied, vagueness on the part of the Polish government about its schedule for joining the eurozone. Apparently Poland has an unexpected family obligation, or a doctor’s appointment, and can’t give up the zloty for the moment. Oh, we understand, how about the year after? No? So we should call your secretary?
A bit less than a month ago, I wrote that Europe writ large would agree on a “Uruguayan” reprofiling solution for Greece, that is, a voluntary extension of public bond maturities that would not, by consensus, constitute a default. After a week or two, that was transformed from a marginal to a consensus view, with the encouragement of German and subsidiary country officials. While the European Central Bank board remained vocally opposed to the reprofiling, the assumption was that the combined power of the International Monetary Fund and the Teutons would eventually prevail.
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