Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

It did so in the face of IMF calculations that suggested that to achieve debt sustainability Greece needed to sell off public assets to the tune of 50 billion euros. Indeed, according to a further IMF assessment released on July 4, even that would not be enough.46 It would take not only austerity and privatization but a truly heavy bondholder haircut to get Greece to sustainability. The tone of the talks with the International Institute of Finance (IIF), which had begun on June 27, suggested that there was little prospect of that. The banks and other bondholders were making only modest concessions. That suited the ECB, which was desperate that there should be no “default event,” but it stood in jarring contrast to the tens of billions of euros in cuts that Athens was imposing on its citizens. For Greece, the new Merkel-Obama dispensation was revealing itself to be extend-and-pretend in a new guise.