18 May '11, 9pm

EZ now moving from "lend & pray" to "extend & pretend" (reprofile/ "soft" restructuring). Harder restructuring needed

The countries known collectively as the PIIGS - Portugal, Ireland, Italy, Greece and Spain - are burdened with increasingly unsustainable levels of public and private debt. Several of the worst-hit - Portugal, Ireland and Greece - have seen their borrowing costs soar to record highs in recent weeks, even after their loss of market access led to bailouts financed by the European Union (EU) and the International Monetary Fund (IMF). Spanish borrowing costs are also rising. Greece is clearly insolvent. Even with a draconian austerity package, totalling 10 per cent of gross domestic product (GDP), its public debt would rise to 160 per cent of GDP. Portugal - where growth has been stagnant for a decade - is experiencing a slow-motion fiscal train wreck that will lead to public-sector insolvency. In Ireland and Spain, transferring the banking system's huge losses to the governme...

Full article: http://www.todayonline.com/Commentary/EDC110519-0000236/O...

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