Tuesday, September 27, 2011

ECB setting Greece up for a crash

Normally, things work like this for nations in crisis. Greece has experienced severe capital flight yet its current-account deficit has remained almost unchanged; its international reserves are little changed. On net, €24 billion of private capital left the country between 2008 and 2010, but Greece still managed to accumulate a €85 billion current-account deficit – 12% of GDP. Aaron Tornell Frank Westermann from VOX
The current account deficit is maintained by the ECB bond purchases from Greek government. The ECB has no intention of forcing a restructure on Greece.

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