Calamos Supports Greece
GreekReporter.comGreek NewsEconomyRoubini: Greece Has To “Orderly” Restructure Its Debt - Krugman Says...

Roubini: Greece Has To “Orderly” Restructure Its Debt – Krugman Says 50% Chance That Greece Leaves Eurozone

Greece should restructure its public debt “in an orderly way” in the coming 6 to 12 months, New York University professor Nouriel Roubini (photo) warned, according to Bloomberg.
“What we need to do to avoid having massive losses for the financial system is an orderly restructuring of the public debt of Greece,” Roubini said in an interview at the Zermatt Summit in Switzerland.
Greece could restructure its debt by extending its maturities by 5 to 10 years and cutting interest payments, while keeping the face value of bonds at par, added Roubini.
The debt laden country must also cut its debt-to-gross domestic product ratio further than the levels prescribed in the EU/IMF aid mechanism, he said.
“Stabilizing your public debt-to-GDP ratio at 145 percent is not stability,” Roubini said. “Calling it stability is a bit of a joke.”
Krugman Says 50% Chance That Greece Leaves Eurozone
Nobel prize laureate Paul Krugman doubted Thursday on the EUR110 bil. rescue plan drawn up for debt-laden Greece will work, AFP reported.
He noted that he believes the country still faces a 50-50 chance of ejection from the eurozone.
“Through monstrous sacrifice, what Greece manages to do over the next five years is increase its debt from 115 to 140 percent of GDP,” Krugman told the Swiss Economic Forum.
“And for some reason, we’re supposed to believe that as of 2015, Greece regains access to the (financial) markets and everything is fine. I don’t quite understand why that’s supposed to work,” said the economist who won the Nobel Prize for economics in 2008.
The Princeton scholar said eurozone countries are unable to leave the euro because “to do so would be to invite massive bank runs.
“But what if the bank runs happen anyway?” he asked, pointing to the debt crisis in Argentina in 2001 when banks were forced to close. “Once you’ve done that, the possibility of exiting the single currency arises.
“I would say that there is about a 50-50 chance in the case of Greece that something like that will happen — that we’ll finally see it ejected from the euro.”

See all the latest news from Greece and the world at Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!

Related Posts