Steven Pearlstein - Greece and the myth of the easy economic fix

Steven Pearlstein - Greece and the myth of the easy economic fix

It is now with the same misguided determination that some European officials have tried to shut down any discussion of a restructuring of Greece's debt, or that of any other eurozone country, on the theory that a default for one would be a default for them all.

In fact, markets are fully capable of distinguishing between the finances of different countries that may use the same currency, just as they can distinguish the bonds of the state of California from those of Utah. And although any country that defaults will surely face the prospect of being shut out of credit markets for years, that punishment is no different than what was meted out in the past to countries such as Greece and Italy, when they were free to escape financial predicaments by repaying their debts in devalued currency.