In this context it’s worth noting that Simon Johnson, who used to be the IMF’s chief economist, says that the Fund “floated in some fashion an alternative scenario with a debt restructuring, but this was rejected by both the European Union and the Greek authorities”. What that means is that the idea is being seriously talked about at the highest levels — and that even if the Greek government isn’t going to crack right now, it has a clear “in case of emergency, break glass” Plan B temptingly sitting there for whenever the pain of recession becomes unbearable. With Lazard on board as sovereign advisors, a clear plan of action from Buchheit and the IMF comfortable in principle with a default, the path of least resistance is quite clear.
