Collateral squabble casts doubt on Greek bail-out

This week, the markets’ focus has fallen back on Greece. In addition to long-standing doubts over whether a sufficient number of private-sector creditors will sign up to the Greek debt exchange scheme, European policymakers are now squabbling over the issue of whether Greece should provide collateral for its new bail-out loans. While policymakers have time to resolve the latest debacle, it highlights the huge political constraints that European policymakers are facing and casts doubt on whether the euro-zone will be able to prevent the euro-zone crisis from escalating further.