0505 Greek End Game

May 5, 2010, 4:59 pm


Greek End Game
ギリシャのゲームオーバー
Many commentators now believe that Greece will end up restructuring its debt — a euphemism for partial repudiation. I agree. But the reasoning seems to stop there, which is wrong. In effect, the consensus that Greece will end up defaulting is probably too optimistic. I’m growing increasingly convinced that Greece will end up leaving the euro, too.
多くのコメンテータが、ギリシャはその負債を結局はリストラする羽目（一部放棄という婉曲的な表現を使っているが）になると思っている。私もそう思う。しかし、推理はこれだけでは、終わりにはならないようだし、それだけでは間違っている。実際、ギリシャがデフォルトを選択するのは、楽観過ぎると言う世論が生まれている。

I’ve basically laid out the logic already: even with a debt restructuring, Greece will be in deep trouble, forced to engage in severe austerity — and provoke a deep slump — just to close the primary, non-interest deficit.
私は、その論理を既に基本的には説明している。債務のリストラでさえ、ギリシャは悲惨な状況になり、苦難を強いられることになる。というのは、深い不況を引き起こすことになるのは、純負債に近いだけの無利子負債にある。

The only thing that could reduce that need for austerity would be something that helped the economy expand, or at least not contract as much. This would reduce the economic pain; it would also increase revenues, reducing the needed amount of fiscal austerity.
緊縮財政の必要性を減らす唯一の方法が、経済成長を引き起こす、又は、それほど縮小せずに済む何らかの出来事である。このことが経済的痛みを和らげる。

But the only route to economic expansion is higher exports — which can only be achieved if Greek costs and prices fall sharply relative to the rest of Europe.
しかし、経済拡張の唯一の手段は、より輸出を増やすことにある。このことは、ギリシャのコストや価格が他のヨーロッパ諸国に対して顕著に下がれば、成し遂げることができよう。
If Greece were a highly cohesive society with collective wage-setting, a sort of Aegean Austria, it might be possible to do this via a collectively agreed reduction in wages across the board –an “internal devaluation.” But as today’s grim events show, it isn’t.

The alternative is a devaluation — which means leaving the euro.



Any announcement of plans to leave the euro would, as Eichengreen points out, trigger disastrous bank runs. By the same token, any suggestion by outside players, like the ECB, that the option exists would amount to invoking a speculative attack on Greek banks, and therefore can’t be made. The whole thing is effectively undiscussable.



But that doesn’t mean it can’t happen. Greece is already starting to look like Argentina 2001.



Again, this isn’t an alternative to debt restructuring; it’s what might be needed in addition to debt restructuring to make the fiscal adjustment possible.



I hope that somewhere, deep in the bowels of the ECB and the Greek Ministry of Finance, people are thinking about the unthinkable. Because this awful outcome is starting to look better than the alternatives.