Greek Debt and Greek Bailouts Changing too Fast for Commentary

But Commentary Anyway

One thing that the U. S. negotiations on deficit reduction  and European negotiations on how to solve the dilemma of bailing out Greece (without looking like it is bailing out Greece) have in common is that every day brings a new plan, a new position by the parties and new questions about where this is all headed.

In Europe the key players trying to bail out the Greek economy are continually meeting on the how and what to do.  This is also an picture that changes daily, and commenting on any proposed plan is useless because that plan will be gone the next day.

The current situation, so one report says,

           




Pool photo by Steffen Kugler

Chancellor Angela Merkel of Germany, right, met Thursday
with Prime Minister George Papandreou of Greece,
 center, and President Nicolas Sarkozy of France,

 

European leaders have agreed to loan Greece more than $140 billion over the next three years and have broadened efforts to support weakened governments and banks .  .  .

The plan under consideration would allow Greece to default temporarily, and would include the bond buyback and a debt swap but no new tax on banks.

Since German voters, amongst others are going to be really, really unhappy with any economic aid to Greece, no one should expect the ink to dry on this plan before the next one is introduced.  And the concept of a "temporary default", what is that?  Defaulting is like squeezing the toothpaste out of the tube, once you do it there is no going back.

So here is what we have.

1.  Greece will get even more money that they cannot pay back.
2.  Banks that hold Greek debt will suffer a "temporary default", similar to Borders Book Store suffering a temporary Going Out of Business Sale.
3.  Europeans leaders will cngratulate themselves on agreeing on a plan to save the Euro.
4.  The process starts all over again when European leaders wake up to point 1 above.

Yep, that should work out fine.