Wall Street Journal
September 2, 2010
The International Monetary Fund delivered a mixed message Wednesday, warning that many wealthy countries are amassing risky debt burdens but playing down the likelihood of a Greek default.
"The current risk of default in Europe is overestimated," IMF economist Paolo Mauro said.
In three papers prepared by IMF economists on fiscal issues and published Wednesday, the fund said that a number of countries are running perilously close to their "debt limit"—a point at which markets might react to the threat of default by boosting interest rates sky high on new borrowing. According to the IMF analysis of 23 wealthy countries, Greece, Iceland, Italy, Portugal and Japan are very close to that point, while Ireland, the U.S., Britain and Spain are moving into dangerous territory.