Greece has been 'repaired' with an application of yet another plaster to a gaping shark wound.
The ECB hiked ELA once again, this time, reportedly, by 'just under' EUR1bn.
The terms of 'repairs' are sketchy for now, but for the economy that shrunk 23% since pre-crisis peak in real terms, we have novel - nay, breakthrough novel - measures to support growth included in the deal:
- Corporate tax is rising from a rather un-competitive 26% to a highly uncompetitive 29%
- Corporate profits in excess of EUR500K/pa are hit with a 'solidarity' levy of 12%
- Personal taxes are up, VAT is up, pension levies are up, property taxes are up
- Debt relief is not on the cards, as per Angela Merkel, the 180% GDP debt mountain "...is not an urgent question".
Summary of key financials on the 'deal' is here:
In short, we have an equivalent of economic idiocy here: an economy choked by too much debt is being given a green light to get more debt. In exchange for this debt, the economy will be choked some more (by some 2.7% of GDP on full year basis), so that more debt given to it can be rolled over with a pretence of sustainability.
European leaders celebrate this crowning achievement of statism by replaying the same song for the 5th time while hoping for a different result. One has to wonder if there is something fundamentally, deeply, inexplicably wrong with the EU logic.
Or maybe, just maybe, the Greek 'reforms' are a herald of things to come under the Juncker-proposed, ECB et al approved, new Federalismo 2.0 plan? Why, check the leaks on that one.