Greek Recovery: If Something Cannot Happen, It Will Not Happen
In order to stave off a complete financial collapse the Greek government agreed to the impossible task of running a budget surplus (before interest payments) of 3.5%. In return the European community and the IMF gave
Greece massive loans. Now the loan money is running out and the
bill collector is coming to Athens.
Wolfgang Munchau, probably the best of the world’s financial writers explains.
Failure to tell truth to power lies beneath much of what is going wrong in
|No it's not a TV show - It's the Soon to Be Greek Economy|
The problem is the same that any debtor who is over extended.
Greece cannot pay back the money it
borrowed. It’s creditors will not allow
it to restructure (forgive) part of the debt.
It needs more money just to avoid default and collapse and ejection from
the Euro and the EU. A big payment is due this summer.
Athens will either default on its debt this summer and be forced to quit the eurozone, or
will accept debt relief just a few
months before the elections. Either way, this is a fight in which someone ends
up on the floor. Berlin
The someone who ends up on the floor is almost certainly
Greece. Yes, part of it is its own fault, but a large
part is a failed European policy led by Germany. And if the EU collapses, well, welcome to a
world of hurt everybody. At best the can will be kicked down the road, again. But the road is a dead end and there's not much pavement left.