The WSJ ignores the most important topic when considering the Greek bailout. The article presents everything as being rosy with these reforms agreed to and this and that scheme only a few weeks away from success, but what the budget deficit? Tax revenues have continued to underperform expectations, and this trend shows no signs of abating. A lot of Greeks are out of money, and those that still have some are busy hiding it from the authorities.
As we have seen, brinkmanship is the preferred eurocrisis political tactic, but make no mistake about it. Greece will get its aid. Being a ward of Germany for several years now, they know how the system works. As long as officials talk tough and pass austerity measures, the country will keep receiving money.
The issue with Greece is that it budget deficit has not improved much since the crisis started. Last year’s narrowing was mostly the result of the third Greek bailout and debt restructuring. On its own, it continues to burn more cash than it collects.
If Greece requires a few billion extra in 2013, how will the Germans get them the money without upsetting voters before the fall election?