Wall Street Journal
June 7, 2011
In confronting its fiscal crisis, the euro zone has failed to make full use of its strengths, and has instead chosen to cobble together a series of improvised responses that successively fail because they are undermined by its weaknesses.
The fact is that the euro zone's funding gap over the next few years will be much smaller than those of most other major developed economies. If it is to reassure investors that it can remain intact, it must find a way of exploiting that relative strength.
Euro-zone policy makers are now engaged in putting together a fresh package of loans for the Greek government that will involve some form of participation by bond investors, though what form that will take is uncertain.
The package is intended to see Greece through the next couple of years, although very few economists or investors are likely to be persuaded that it will provide a comprehensive and definitive solution to the country's fiscal problem.
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