Greece's Worsening Debt Crisis

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In The Media

Greece's Worsening Debt Crisis

The recent spike in Greek bond yields indicates that markets have not been reassured by European leaders' pledges to support Greece. Unless more decisive, detailed plans are announced, the Greek crisis will continue to get worse.

By Uri Dadush

Published on Apr 8, 2010

Source: Bloomberg News

European leaders recently announced that they will support Greece during its debt crisis, but Greek bonds spreads over the German bund have reached their highest level since the euro’s inception, indicating that markets remain skeptical.

Uri Dadush explains that unless Greece receives the aid that it needs from other European countries and the IMF, a Greek default is unavoidable. The support package announced recently has done little to reassure markets because it lacks specific details and many questions remain. Dadush lists some of the pressing questions: “What is the size of the package? What are the conditions associated with the package? What is the specific role of the IMF? What kind of monetary and fiscal policies will other parts of Europe have to follow?” In order to prevent Greek default and the crisis from spreading to other vulnerable European countries, Dadush concludes, more decisive action is needed.

About the Author

Uri Dadush

Former Senior Associate, International Economics Program

Dadush was a senior associate at the Carnegie Endowment for International Peace. He focuses on trends in the global economy and is currently tracking developments in the eurozone crisis.

Recent Work

Commentary
The Labors of Tsipras
- Uri Dadush
In The Media
Greece, Complacency, and the Euro
- Uri Dadush

Economy Western Europe United Kingdom France Germany North America

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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