Eric Dor, an expert on eurozone capital flows at the Iéseg School of Management in France, says in a paper that while private sector investors hold fewer Greek bonds these days, the exposure of the European taxpayer to Greek debt has skyrocketed to €318 billion.
By refusing to pay Greece the €7.2 billion from the last bailout because of disagreements over economic reforms, Europe is now courting a default on this much larger sum.
It is surprising, Mr. Dor argues in his paper, that European policy makers would take such a risk to defend their economic principles.