Financial Times
July 4, 2011
A myopic game of chicken. That is the best description I have heard of the to and fro between the European banks and their governments over how best to restructure Greece’s swollen sovereign debt problem.
European governments, notably Germany, and the eurozone authorities, notably the European Central Bank, have been so at odds that the public sector response to the issue has been laughably slow.
The private sector response – evident in French banks’ proposal last week to roll over a targeted €30bn ($43bn) of privately owned Greek government debt – is laughably self-serving.
And yet, it is the French banks’ idea, in the absence of any credible alternative, that now has momentum.
The French government has already endorsed it and the rumblings from Berlin – and indeed from the German banks – are that it is a good basic blueprint.
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