P. De Grauwe: Greece is solvent but illiquid

ecb18 juni 2015 – Paul De Grauwe argues that the Greek government is solvent but is trapped in a liquidity dilemma in which it cannot find liquidity because markets believe it cannot find liquidity. He then explores the role of the European Central Bank in this self-fulfilling problem and asks specifically whether its outright monetary transactions (OMT) programme, introduced in September 2012, should be used to ease the constraints on Greece.

Paul De Grauwe is Associate Senior Research Fellow at CEPS and John Paulson Professor in European Political Economy at the London School of Economics and Political Science.

Read the complete article at:Centre for European Policy Studies/P. De Grauwe

©P. De Grauwe, 18.06.2015, BRON

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