January 5, 2011
Harvard University professor Kenneth Rogoff said Greece may yet default on its debts even after the euro member received a bailout from the European Union and the International Monetary Fund to help keep it afloat.
“Greece has quite a track record of default,” Rogoff said today in a presentation delivered at a conference hosted by the Oslo-based Confederation of Norwegian Enterprise. “That is certainly something we may see in the future.”
Though the single currency shared by 17 European Union nations is likely to continue, a few of the region’s members will probably have to restructure their debts, Rogoff said. Euro-region leaders last month agreed to amend the bloc’s treaties to put in place a permanent crisis mechanism in 2013 to contain future debt shocks. That mechanism won’t address existing budget stresses faced by countries including Portugal and Spain.
“We have Ireland, Portugal, Greece, people are worried about Spain,” said Rogoff, who is also a former IMF chief economist. “The debt problems across the periphery countries in Europe are really quite profound; the most likely scenario is that we are going to see a few of the countries end up restructuring their debt.”
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