Jin Liqun, chairman of China Investment Corp's supervisory board, said European authorities have shown a "lack of leadership" on the euro area's debt crisis, and other countries may leave if Greece exits the single currency bloc.
“Ever since the debt crisis broke out, there has never been a master plan for a resolution”, Jin said. “The core members of the monetary union certainly have to keep an eye out for possible copycats should the Greeks be allowed to escape from the crisis unscathed. Too much time has been wasted on endless bargaining on terms and conditions for piecemeal bailouts. You cannot say there is no strategy altogether, but short-termism features prominently in the process for negotiations for bailout.”
Jin said a longer-term solution is needed, as previous negotiations on bailouts have only eroded investor confidence. “The Greeks should be encouraged to work harder, but they should also be given a respite for much longer”, he said. European leaders “should say, ‘okay, we give you 10 years to work off your debt’, then the market would be confident because this is realistic. If the Germans or some other core countries would tell their people, ‘we’ll give Greece a 10-year respite’, probably everything would be sorted out.”
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