Wednesday, April 27, 2011
A Brady Plan for the European periphery
It's been out for a while, but I somehow missed it. Allen & Evans basically argue for a Brady (they call it Trichet) plan for the restructuring of the debt of the European periphery. A 35% haircut and 6.25% interest on new bonds. Will not solve the imbalances at the heart of the problem, but it's a good start. Not sure, however, that we reached the point at which debt restructuring is seen as a necessity. In Latin America in the 1980s it took almost a full decade. The Economist, in their last issue, has come out against it. Hope springs eternal!