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2012-02-14 12:50:11
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.