Martin Feldstein: Postponing Greece’s inevitable default A default by the Greek government is inevitable. With a debt to gross domestic product ratio of more than 150 per cent, large annual deficits and interest rates more than 25 per cent, the only question is when the default will occur. The current negotiations are really about postponing the inevitable default.
If Greece were the only insolvent European country, it would be best if its default occurred now. Cutting its debt in half and replacing the existing debt with low interest rate bonds would allow Greece to service its debt without the excruciating pain that would be involved if it tried to service its current debt.
http://link.ft.com/r/9ULF66/4COHLB/72VMH3/D4APUC/KEYS1D/RF/h?a1=2011&a2=6&a3=22
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