Citigroup’s Buiter: “Greece Is De Facto Insolvent”
Greece is de facto insolvent, says Willem Buiter, Citigroup’s Chief Economist, but a sovereign debt restructuring is likely to be postponed at least until mid-2013, when its EU/IMF programme expires.
In a research note for clients cited by FT Alphaville, Buiter says that as long as Greece remains sufficiently compliant with the conditionality of its EU/IMF program, sovereign debt restructuring is likely to be postponed at least until mid-2013, when its EU/IMF programme expires.
“At that point, it likely will be transferred to the EFSF or its successor. Whether its debt will be restructured at that stage, including haircuts, will depend on factors beyond the sustainability of its debt,” he argues.
Concerning Portugal, he says that after an Irish agreement with the EU/IMF, the market’s attention is likely to turn to the Iberian state, which at current levels of interest rates and growth rates, is less dramatically, “but quietly, insolvent, in our view. We consider it likely that it will need to access the EFSF soon.”
On Spain, he estimates that “in the longer term, there may be a need for large-scale restructuring of the debt of the Spanish banking sector and possibly the sovereign. At longer horizons, high debt levels and political instability in Italy and Belgium may yet give rise to fundamentally warranted sovereign debt crises, while self-justifying crises are possible even in the near term, despite roughly balanced structural primary budgets.”
(Capital.gr)
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Questi, invece, non mollano mai ...