Europe's debt crisis
World's worst menu
Greece has no good options left
May 26th 2011 | Berlin | from the print edition
VIENNA’S glories are largely faded but its name is being mentioned with increasing frequency by the euro area’s policymakers. The “Vienna initiative” was a plan, drawn up in 2009, that halted the rot of financial contagion spreading through central and eastern Europe. Foreign banks pledged not to cut their exposures to the region and run. It is now being discussed as a possible model for resolving Greece’s sovereign-debt crisis.
The need to come up with a new plan for Greece is mounting. On May 20th Fitch, a ratings agency, cut the country’s debt rating by another three notches. Yields on Greek ten-year bonds this week reached 16.8%, more than twice what they were a year ago. With the markets shying away, the country will not be able to borrow afresh next year, as had originally been hoped when the country was first bailed out in May 2010. The IMF’s latest review is due out in June; it is likely to praise Greece for its progress so far but also to fret about how next year’s numbers add up.