Saturday, October 1, 2011

OECD: Huge Strategic Mistake Made In Trying To Save Greece

The Secretary-General of the Organization for Economic Cooperation and Development (OECD), Angel Gurria said that Greece's private creditors must accept suffering losses in the process of reducing debt.

He said the initial reaction to the problems of the European Union with the Greek sovereign debt was a "huge strategic mistake" and the block should not have assumed the commitment to avoid defaults in the euro area at any price.

This commitment "left the European Union's hands were tied when they had to deal with Greece. The problem comes when you say the markets, 'no one will lose a dime, so no matter if you are in Germany or Greece." But of course does it matter, " he added.

He said Greece's debt is "a burden" and that "we did not deal with the country as a debtor who borrowed too much." "Who should pay for it? Obviously the people who loaned the money. It's the oldest story in the world."

Gurria also said he had not understood why the European Central Bank chose to raise interest rates earlier this year and recommended that the institution  decrease the rate as soon as possible. 

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