said that debt crisis in Europe won’t be resolved until a number of countries restructure their debt and clean up their banks’ balance sheets, according to Bloomberg.
“It won’t go away until Europe restructures a couple of sovereigns and deals with its dummy banks,” Buiter said in an interview, clarifying that Greece and Ireland may restructure their debt, though not Spain.
“All that’s been done so far is to kick the problem down the road”, he added.
Buiter commented that European leaders’ decision on the increase of the euro-zone’s rescue fund capacity hasn’t solved the underlying problems that led to the crisis.
He said that leaders, who are refusing to soften the terms of the region’s aid package to Ireland, risk forcing the country to restructure its debt unilaterally.
“They have to come up with something for Ireland,” Buiter said. “The Europeans are playing with fire with this brinksmanship”, he added.
source: CAPITAL
