Sunday, February 22, 2015

22/2/15: Ifo on Eurogroup Conclusions


Ifo's Hans-Werner Sinn on Eurogroup deal for Greece:


I failed to spot where the Eurogroup allows for any 'additional cash' for Greece. 

The core point that Greece "has to become cheaper to regain competitiveness. This can only happen if Greece exits the Eurozone and devalues the drachma." On this, Sinn is probably correct. Unless, of course, there is a large scale writedown of Greek debts accompanied by a massive round of reforms. Both of these conditions will be required and not one of them is on the cards.
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