When it comes to policy advice, be wary of Sachs. This is the man whose shock therapy did wonders for Russia. How apropos to the current debate. If I recall correctly, it was only when Russia kicked out Sachs, defaulted on its debt and devalued the currency that the economy turned around.
The FT’s Gillian Tett sounds a lot more sensible. From today’s FT:
But the alternative to restructuring will probably be grim too. If Greece staggers on, without a miracle, fears about future “haircuts” will continue to poison the bond markets and interbank world. That will essentially produce a pattern similar to Japan in the late 1990s: a world of gnawing, half-concealed anxiety, where asset prices keep stealthily slipping because investors cannot shrug off their fears of more bad news to come.