Grenada offers debt restructuring model for Greece

April 9, 2015

The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.

Greece comes kicking and screaming to reform table

April 2, 2015

The Syriza government’s latest reform proposals include some concessions to its public creditors. The plan still lacks detail, and reneges on past promises. The government is fiddling while Athens burns, and the risk of an accidental euro zone exit is rising.

ECB torn between two roles in Greek bank support

March 20, 2015

The central bank’s monetary policy wing has delayed a plan by its supervisory arm to legally stop Greek banks increasing their stocks of illiquid assets. The stability-searching supervisors have the right idea. But the policy group has an even higher political responsibility.

Hugo Dixon: Greece has no good Plan Bs

By Hugo Dixon
March 9, 2015

Defaulting on its debts and quitting the euro would be a disaster. So would imposing capital controls, while defaulting and staying in the single currency. Athens has no rational course of action apart from working with its creditors to vigorously reform its economy.

Europe’s rebound poses new questions

By Edward Hadas
March 4, 2015

Jobs, growth, morale: the Old Continent is perking up. Policymakers and investors need to adapt. The threat of deflation may recede. Central bank bond-buying may prove unnecessary. And established politicians could regain ground. Yet investors might still cling to bonds.

Time for Greece’s Alexis Tsipras to keep his nerve in debt battle

By Hugo Dixon
February 21, 2015

The new Greek PM has crossed a Rubicon in asking for an extension to the country’s hated bailout programme while abandoning many election promises. Tsipras should realise there is no turning back. But he can snatch victory from defeat if he embraces radical reforms with vigour.

Greece is creating room for deal with euro zone

February 10, 2015

Athens is hinting it will accept most of its bailout programme and wants to change the rest. The government insists on more fiscal leeway and a debt swap. The negotiations with other euro zone members will be tough. But at least there is a basis for reasonable conversation.

Capital controls an unpalatable option for Athens

February 10, 2015

The risk of a Greek euro exit increases the pressure for capital controls. The policy did less harm than expected in the Cyprus crisis, and would buy time for Athens and its international creditors. The snag is that Greece’s position is weaker, and the politics more toxic.

ECB’s Greek bank warning stays within reason

February 5, 2015

The decision to restrict Greek lenders’ liquidity unsubtly hints that Athens should tone down its anti-bailout rhetoric. The ECB may have large discretionary powers – but so far remains within its remit. As previous examples have shown, the meddling could have been worse.

Greek deposits fly between a rock and a hard place

January 30, 2015

One remedy to capital flight would be to give so-called emergency liquidity assistance to Greek banks. But heavy use of ELA could mean big losses if Greece left the euro. The alternative is to copy Cypriot capital controls. That, though, would be politically toxic in Greece.