Professor Ngaire Woods comments on the Eurozone crisis
Ngaire, who is also a member of the IMF European Regional Advisory Board, was asked what happens if Greece defaults on its national debt. She replies that two things must be in place, either beforehand or immediately after: (i) banks in Europe must recapitalised (bailed out if necessary), and (ii) every government in Europe (particularly Italy and Spain) must have access to massive liquidity lines.
Because of this, she said, every European country is being asked to substantially increase their financial contribution to the Eurozone, but she added her own view that this funding should be bolstered by an additional credit line from the International Monetary Fund, because she felt that Shock and Awe tactics are necessary to reassure the markets that European governments are not going to fall as a result of this.
Ngaires Live Breakfast interview can be heard here (c. 2:05.50 on iPlayer clock).
