Alan V. Deardorff quoted in Fortune about Greece, Europe debt crisis
Wednesday, September 28, 2011
Alan V. Deardorff was quoted in a Fortune article titled, "Wanted: A radical idea to fix the Eurozone." The article discusses a bold solution proposed by Harvard economist Kenneth Rogoff that would provide aid to Greece and other struggling EU countries in exchange for bigger loan repayments to lenders in the long-term.
The idea is to give Greece a large bailout and slowly increase the country's debt payments as its economy improves. With this model, the Fortune journalist notes, both Greece and its investors would have an interest in seeing the country succeed.
Some critics say this is still simply a bailout plan, and that rich countries have grown weary of giving money to poor countries that failed to spend within their means. "The problem isn't just getting rich countries on board," Deardorff explained to Fortune. "Greece would need an incentive to agree to what would essentially create a tax on any rise in income. Indeed, any collection on future GDP growth would have to be limited to a certain percentage so that Greece would have an incentive to grow its economy. And growth, at least in the long-term, would depend significantly on deep structural reforms in the state's economy."