THE WALL STREET JOURNAL: With the IMF and euro-zone governments finalizing the debt-rescue package for Greece, there is almost unanimous agreement on one thing: European governments could hardly have managed it worse if they had tried.
"The Greek crisis has been so severely mishandled by European policy makers that the markets legitimately fear that matters are now beyond repair," argues Alessandro Leipold, a former acting director of the International Monetary Fund's European Department.
Here's another verdict that explicitly links Europe's handling of the crisis with heavy costs for Greece and possibly for the entire euro zone. "The fractious nature of the [European] assistance has likely created permanent damage. Debt will likely stabilize at a higher amount and at a higher economic and social cost than previously expected," Moody's said in a report this week.
There is cold comfort for governments seeking a European solution to a European problem in the knowledge that the institution monitoring Greece's rescue is run by a European. The European in question is IMF managing director Dominique Strauss-Kahn, whose office is in Washington.
The lessons from sovereign debt crises over 30 years suggest they will intensify until the financial markets are confronted with evidence that leads to a sharp shift in investor expectations. If a bailout is being contrived to change those expectations, it needs to meet several conditions. >>> Stephen Fidler | Friday, April 30, 2010
