A Critical Analysis of Potential Solutions For Rescuing The Eurozone

This is another critical article that speculates upon what European leaders might do to rescue the eurozone. The banks will have to write down the value of the loans that they have made to Greece. Some say that the write down could be as high as 60%. This is much higher than the 21% that the banks were willing to write down voluntarily in the original plan. No matter what happens, some banks will need government help to recapitalize, and credit will be less available. That will slow down economic growth. Its also hard to imagine how the countries which need help in servicing their debt can grow their economies and also satisfy the austerity demands required of them in order to receive help. There is also a plan to provide a guarantee for the funding needed by countries that would otherwise face very high interest rates. The problem with this plan is that some of the countries that need help would also be part of the guarantee that is provided to investors.