New York Times
June 5, 2011
As European leaders move toward a second bailout for Greece, some economists are warning that a new rescue would merely kick the country’s problems further down the road and might not avert a default that could strain Europe’s monetary union.
A year after providing an aid package of 110 billion euros, or $161 billion at current exchange rates, officials are considering whether to lend Greece an additional 50 billion or 60 billion euros as the country struggles with a deep economic downturn.
Even if Greece is pulled from immediate danger again, economists say, European leaders face the prospect of providing still more aid over the next several years if Greece cannot revive its economy.
“I don’t see how Greece can eventually avoid some kind of default,” said Martin N. Baily, a senior fellow at the Brookings Institution, who served as chairman of Council of Economic Advisers under the Clinton administration. “It’s hard to see how you can avoid the need to finance this over the next five to 10 years.”
His sentiment was echoed widely among economists, politicians and analysts gathered here over the weekend for a conference held by the Council for the United States and Italy.
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