Premier Partners Group says that Greek Prime Minister, George Papandreou should give serious consideration to allowing Greece’s sovereign debt to be restructured. The company’s statement came after news emerged of the additional austerity measures his beleaguered government must impose on his country in order to secure a fresh international bailout.
In addition to expediting plans to sell off Greek state-owned assets, the government has proposed that another €6.4bn be trimmed off an already meager budget that cannot pay for the country’s public utilities.
“The government must be able to hear that the [Greek people’s] pips have already squeaked,” said Premier Partners Group's Paul Bossard in a telephone interview.
The banks and financial institutions in many European countries that make up the majority of Greece's lenders would undoubtedly suffer heavy losses if Greece was to default on its obligations. “The event could effectively cause a new credit crunch within the Euro zone and that’s why the ECB and the IMF are so keen to avoid it but, as we all know, blood cannot be extracted from a stone. The banks need to be made to pay for their poor investment choices in the same way ordinary investors have to,” concluded Mr. Bossard.
A Premier Partners Group researcher pointed out that the proposed measures will result in Greece remaining in recession for a very long time.
The firm advises clients to eschew all Western sovereign debt in favour of precious metals and other hard assets.
