Speaking at an event last night at the London School of Economics, Kraemer said he believed that this time round, Greece would have to involve bailout partners such as the International Monetary Fund. Commenting on the likelyhood of a further restructuring, he siad:
I’m not predicting today when ... At that time maybe the official creditors need to come into the boat.
Perhaps he was alluding to the Titanic.
Imposed Greek dictator Lucas Papademos managed to get Parliamentary approval just over a week ago for the latest €130 billion bailout package, with its associated suicidal austerity.
Despite that, it will come as no surprise that Greece is still struggling to raise money on the markets at sensible interest rates. The situation is not helped by organisations like the European Central Bank claiming priority on outstanding Greek debt, leaving ordinary bond holders taking much more risk, resulting in demands for higher interest rates.
Speaking at the same event, the IMF's Poul Thomsen said it would take at least a decade for Greece to complete its restructuring. ECB Executive Board member Joerg Asmussen went further. He said:
Without a regime change in policy implementation and a much broader political consensus in favor of painful but necessary reforms, there is a high risk that the program derails. Political courage is needed more than ever.
Greece has already been through one regime change, so this is interesting language from the ECB.