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A crisis that's just too big to go away

ON the streets of Athens, Greeks are becoming increasingly wary of foreigners bearing gifts. Within the city walls they are wondering was the bailout a Trojan horse, especially as they prepare to sell off a massive hoard of state assets, all to meet the terms laid down by the ECB and the IMF.

The sighs heard on the announcement of the new terms were more of resignation than relief. And one can understand why.

While the infamous "troika" -- the EU, IMF and European Central Bank -- may provide €85bn, of which €30-€40bn would come as EU and IMF loans, the rest must come from privatisation proceeds and private-sector debt relief.

The protesters in the streets complain this is more of a mugging than a rescue.

The new measures provide for the Greek government to create an independently managed privatisation agency. This amounts to polishing the family silver before a sell-off.

After a month of financial vivisection, the verdict seems to be that Greece has made some progress. Yet it was also pointed out that fiscal and structural reforms must be stepped up. This is damning with faint praise at its finest.

Athens has certainly veered off course because of a massive revenue shortfall caused by a deep recession.

The failure to deal with chronic tax evasion is also hitting the crippled economy.

The mandarins in Washington and Frankfurt may tut-tut, but there is no escaping the fact that the new programme faces mass opposition. Nor will Prime Minister Papandreou's governing PASOK socialists be overly enthused. An increase in EU funding for Greece will also shore up trouble in the German, Dutch and French parliaments.

Taxpayers across the eurozone are smarting at any extra burden. The mounting indignation stems from the fact that the investors who bought Greek government bonds do not share the pain.

It is only a matter of time before either their value is cut or maturities are extended.

But the European Central Bank is implacable on both counts. It fears that such measures could provoke a violent chain reaction on financial markets.

The crisis refuses to go away for all their nervous deliberation. The simple truth is that Greece's €340bn debt is too big an elephant in the room to ignore, and it will have to be restructured. Any of this sound familiar?

Irish Independent