Greece Bailout Only Kicks The Can Down The Road, Again

Includes: EU, FXE
by: John M. Mason

The eurozone has acted. Greece is going to postpone bankruptcy for a while longer as it was given 130 billion euros to help it cover, among other things, debt coming due in March.

Problems still remain.

  • First, Greece is still insolvent.

  • Second, Greece still has major structural problems in its economy and society.

  • Third, Greece is in a severe recession.

  • Fourth, the eurozone is in the midst of a recession.

  • Fifth, 90 percent of the holders of Greek debt must sign up for the bond swap. If they don’t there may be severe legal problems.

  • Sixth, the Greek government must still implement the policies and programs required by the bailout plan.

  • Seventh, Greek society must hold together. The question still remains about how the Greek people will “suffer” the policies and programs required by the bailout plan.

  • Eighth, elections for a new Greek government will be held in April. There is uncertainty about what will result from this election.

  • Ninth, there is concern over what is going to happen in the Middle East. The focus is on Iran, Israel, Europe, and the United States.

  • Tenth -- enough said, given all the other problems and uncertainties in the world today.

Bottom line: The major issues outstanding have not been dealt with; there is little or no confidence in the officials in charge; and the world needs to move on but still has the Greek problem to deal with.