NY Timeshttp://www.nytimes.com/2010/11/23/busin ... .html?_r=1
November 22, 2010
In European Debt Crisis, Some Call Default Better Option
By LANDON THOMAS Jr.
DUBLIN — Ireland has finally taken its medicine, accepting the financial rescue package European officials have been pushing for several weeks.
But even as Europe moved to avert this latest debt crisis, economists and policy experts are increasingly debating whether it would be better, and fairer, for the Continent’s weakest economies to default on payments to lenders.
Many experts now say that bailouts only delay the inevitable. Instead of further wounding their economies with drastic budget-slashing, the specialists assert, governments should immediately start talks with bondholders and force them to accept a loss on their investments.
The risk, of course, is an investor panic that would seize financial markets at a time when the global economy remains on tenterhooks.