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segunda-feira, julho 13, 2015

Default as the alternative to bailouts

 "Credit workout renegotiations do often bring out the worse in both debtors and creditors, when they come to the realization that they fooled each other...". 
A reader asks:  Do you have an alternative solution? 

Yes, the alternative is the D-word, default and suspension of payments, stand-still. 
What in the US is called Chapter XI protection from creditors: No one gets paid until everyone sits down together and find a ways to save the borrower and get payments trickling back again.
Instead of big bailouts to recycle loans from the existing to new creditors, a game of creditor musical chairs, some New Money Loans are provided to get the real economy growing again, pre-export finance, etc.  
The borrower goes into deep austerity, it's true,  but that is unavoidable. 
The original foolish lenders take losses, but they should have known they were making bad loans.  
New creditors stay out of the mess, until the borrower and the existing creditor find a new basis for growth and repayment.  
In that order:   GROWTH and REPAYMENT.  

In Eurozone we have done EVERYTHING backwards, steamrolling the most fragile borrowers and passing the loss to foolish new creditors.   
These credit workout failures,  on top the the credit management failures of the previous decade,   are not a good foundation for the future of a monetary zone. http://ppplusofonia.blogspot.pt/p/crise-da-eurozone.html

1 comentário:

  1. Um default honrado preferível à austeridade draconiana sem rede, ou à repudiação da dívida

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