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Greece's woes - A reprieve, nothing more

Feb 13th 2012, 15:14 by A.P.

RIOTING in Athens, a crucial late-night vote on austerity in the Greek

parliament and just enough accomplished to unlock the latest round of bail-out

money from Greece s official creditors when euro-zone finance ministers meet

again in Brussels on Wednesday. The euro-crisis script has not changed much

over the past year.

If things run to form, the risk of imminent, disorderly default will be

deferred this week. Most private-sector creditors will agree to swallow a big

loss on their holdings of Greek bonds; and Greece will legislate to ensure that

hold-out creditors are forced to accept the same terms. Official creditors will

nod through a 130 billion ($172 billion) bail-out, enabling Greece to meet a

big bond payment due in March.

Greece s agonies are by no means over, however. Although the country s debt

burden will be cut as a result of the private-sector losses, the relentless

rhythm of regular troika assessments and poisonous rows over disbursements will

continue. The weekend s events do nothing to instil confidence that Greece will

suddenly start fulfilling its promises. Forty-three deputies were expelled from

their parties for voting against the caretaker government of Lucas Papademos. A

requirement that the leaders of the main parties have to follow through with

cuts regardless of the results of coming elections will be tested to

destruction when campaigning actually begins.

So the rest of the euro zone will probably keep confronting the same old

question: whether they are prepared to keep handing over cash to Greece. The

evidence of recent days is that the patience of euro-zone leaders is running

out. They took a tougher line in last week s negotiations than many had

expected. The focus on Germany s willingness to pay up risks distracting

attention from other creditor states, like Finland and the Netherlands, which

are equally fed up with handing out money and have fewer hang-ups than Germany

about playing the part of good Europeans. And if Italy and Spain are able to

make decent progress in dealing with their own public finances, the rest of the

euro zone will feel more confident about limiting the fallout from a decision

to turn off the Greek tap. Greece has delayed a messy default, but it will

happen eventually.