Bite the bullet
In the first of three articles on the euro zone’s sovereign-debt woes, we present our estimate of the burdens on the currency club’s four most troubled members
THE euro zone's strategy for tackling its sovereign-debt crisis is failing. A makeshift scheme was put in place in May to help countries that cannot otherwise borrow at tolerable interest rates. That lowered but did not remove the risk that a country may default for want of short-term funds. But the bond market's nerves have been shredded again by the likelihood that from 2013, when a permanent bail-out mechanism is due to be in place, it will be easier to restructure an insolvent country's debts. More worrying still for private investors, this seems set to give official creditors preference over others.
This article appeared in the Briefing section of the print edition under the headline "Bite the bullet"
From the January 15th 2011 edition
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