Greece Again

Europe drawn back to its first problem: Greece | Reuters.

Politicians like to make the Greek problem seem more complex than it really is. Basically, can Greece repay its debts? The answer is that it cannot. When this bailout was slapped together in March, the markets were getting panicky. To maintain order, the bailout was pushed through when the relevant players knew that Greece would never be able to stick to its terms. The idea was to cut Greece’s debt to 160% of GDP and then begin paying it down to 120% by 2020.

These numbers were illusory at the time, and there is no way that Greece will ever be able to pay back this money. Revenues have been worse since the deal was struck, and GDP has dropped more than forecast. The debt level has actually risen since the bailout. If one reads the news every day, then one knows these facts and the inescapable conclusion they lead to: that Greece is broke and the situation is getting worse.

The troika report due in October or whenever it best suits the politicians is merely more can kicking. The only question the report will answer is, “How much more money does Greece need?” Waiting for the report is merely a ruse to stall for more time. Greece needs help, and the politicians need to figure out  a way to provide it while making sure they can get themselves elected.

Ultimately, the troika will ante up more money to help Greece. No one wants to be blamed for the catastrophe that would follow in the wake of a Grexit or default.


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