“The Biggest Constraint To The EU’s Survival Is Debt”: Pettis

Michael Pettis argues that EU debt restructuring should happen soon, before it does even more damage to the euro zone

While most of the debate over Greece centers on this week’s negotiations and payments that need to be made between now and the end of July, but Michael Pettis, finance professor at Guanghua School of Management at Peking University, argues that putting off the inevitable debt restructuring threatens the survival of the European Union.

“I would argue that the biggest constraint to the EU’s survival is debt,” Pettis writes in a recent blog post. “Europe will not grow, the reforms will not ‘work’, and unemployment will not drop until the costs of the excessive debt burdens are addressed.”