Download Page number problem in Japanese

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Greece is a chronic defaulter. Since winning independence from the Ottoman Empire in
1832, the nation has spent half its time in various stages of default or restructuring. At
one point in the middle of the 19th century, Greece was in default—meaning out of
compliance with debt obligations—for 53 straight years, according to This Time Is
Different: Eight Centuries of Financial Folly by economists Carmen M. Reinhart and
Kenneth S. Rogoff.
If Greece defaults again, this time really will be different. The finances of the world are
linked more tightly. Derivatives obscure and sometimes concentrate risks. Greece is
locked into a single currency with 16 other nations. It's possible that the global economy
could get lucky, and a Greek default will be a minor event. But it's also possible that a
default would cripple a chain of vulnerable economies, including Ireland, Portugal, and
Belgium. The nightmare scenario: defaults by Spain and Italy, which might thrust all of
Europe into a deep recession.
When big banks fall, as they did in 2008, nations rescue them. When big nations fall,
there is no one strong enough to hold the safety net. "Failure to undertake decisive
action could rapidly spread the tensions to the core of the euro area and result in large
global spillovers," the International Monetary Fund, which is no stranger to sovereign
debt crises, warned on June 20.
Can disaster be averted? The answer is yes, because a solution exists. It doesn't involve
simply reprimanding the Greeks to cut their way back to good health, as the Eurocrats
in Brussels have been pushing for. Nor does this plan force creditors to accept
repayment stretched out by seven years, as Germany, until recently, has advocated.
Best of all, the world has tried it before—and it worked.
The idea, which has floated around for months without getting much uptake from
European decision-makers, is to scarf up Greece's unaffordable debt on the open market
and exchange it for new, more affordable long-term bonds issued by a (presumably)
reformed Greek government. A deal like this, modeled on the approach that helped
Latin American nations emerge from debt crises in the early 1990s, would save Greece
money on interest, while getting its debt into the hands of investors who want to hold it,
instead of ones who can't unload it. (It's worth emphasizing that investors are not
blameless—chasing after high returns, they ignored the warning signs that Greece was
in over its head.)
A good time to try something like this would be, oh … yesterday. The debt crisis is doing
visible damage even without a default. The Greek economy shrank 5.5 percent over the
past year under the weight of austerity measures and punishingly high interest rates.
Unemployment was 15.9 percent in March. Less visibly, though dangerously, European
banks are getting nervous about their peers' creditworthiness. Instead of borrowing
from one another, as usual, a growing number of banks—353 as of June 21—are getting
loans from the European Central Bank itself through the so-called repo window. They're
also asking the ECB for more cash than the ECB expected they would want. Those are
early warnings that there's a "growing liquidity squeeze," says Lena Komileva, global
head of G10 strategy for Brown Brothers Harriman in London.
Although some kind of compromise that averts default is in everyone's best interest,
progress toward a deal has been slow because each player in the Greek drama has an
incentive to play tough until the last minute. Greece's opposition New Democracy party,
which is leading in opinion polls for the next election, opposes more concessions to
creditors and withheld support from Prime Minister George Papandreou in the
confidence vote that he survived on June 22. Under pressure from the German public,
Berlin is demanding more budget cuts and asset sales by Greece, as well as shared
sacrifice by private creditors. The European Central Bank says it will stop accepting
Greek sovereign debt as loan collateral if there's any hint of default. And so on.