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One thing protects Greece in all this mess. The vulture funds can't swoop in and buy the defaulted loans because the jurisdiction for all these notes is in Greek courts. This is quite different from how vultures typically deal with defaults in Africa or Asia or even South America.
This is actually a reason to oppose any "Eurobonds" solution which doesn't include an explicit EU-wide surplus-recycling mechanism (e.g., Varoufakis' beefed-up European Investment Bank proposal).

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Fri Jun 17th, 2011 at 10:14:44 AM EST
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Skimping on the EIB is IMHO one of the two most likely points of failure of Yanis' proposal. Public investment being such an alien concept in today's environment. The other being insufficient recapitalisation of the banks. Who knows how deep they really are in the red?
by generic on Fri Jun 17th, 2011 at 12:16:28 PM EST
[ Parent ]
After 4 years of global crisis, 2 1/2 years from Lehman, and 16 months of Greek crisis with two rounds of EU-level stress tests, you would hope they would know.

The fact that the people in charge are running around with their hair on fire as we speak does not make me too confident that they know. Or maybe they know but are in denial.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Sat Jun 18th, 2011 at 02:41:39 AM EST
[ Parent ]

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