Crunch time for Greece’s debt woes

Par960935With Greece’s debt troubles threatening to spread to other indebted European countries and undermine the continent’s economic recover and monetary system, officials are seeking an aid package from EU nations and the International Monetary Fund to stave off disaster.  International relations Professor Kevin Gallagher says the “tyranny” of the bond markets is that ratings agencies can trigger default contagion.

“The elephant in the room that needs to be addressed is the role of credit rating agencies in accentuating crises. The IMF and the EU have been getting closer to a deal each day. The rating agencies then come in and downgrade Greek debt to junk and the floor falls out. Reform is urgently needed.”

Contact Kevin Gallagher, 617-353-9348, kpg@bu.edu

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