Mats Persson: The bad news for the Greeks is that they will problably default eventually anyway
Published 10/02/2012 | 15:08
OK, so here’s the good news: Greece has moved one step further away from a chaotic default. Greece’s political parties have reached a preliminary deal on a slew of austerity measures after weeks of huffing and puffing – and posturing – between the members of the Greek ‘unity’ government.
Here’s the bad news: Greece may well suffer a full default anyway – at least eventually.
In a sign of just how long the road ahead is for Greece (and the eurozone), only hours after politicians in Athens had agreed the additional measures, eurozone Finance Ministers dampened any temporary optimism, demanding even more. Athens now has to provide the details of how they intend to fill a budget gap of €300+ million, pass the new austerity package through a deeply divided parliament and submit written guarantees that it will actually implement the measures – all by next week. Only then will the IMF and EU get the cover needed (the code is "debt sustainability") to sign off on a fresh €130bn bailout package, meaning Greece will be able to write down part of its debt and narrowly avoid hitting the iceberg this time around.