Huffington Post
June 19, 2011
The crisis over Greece's sovereign debt deepens daily as the reality gap grows between the politically driven views of EU leadership and the market-place views reflected in such things as interest yields on 2-year Greek notes and premiums payable on CDS covering Greek debt, both of which have soared in recent weeks to astronomical heights.
Market professionals the world around know Greece suffers from a condition of bankruptcy rather than a crisis of liquidity, and therefore cannot survive without very significant debt relief and restructuring combined with a complete overhaul of civil society, particularly the deeply conflicted and corrupt ways in which its Government collects and expends tax proceeds and regulates economic affairs.
Despite heroic efforts by the ECB and IMF, it remains highly unlikely that Greece can achieve the necessary reforms without the Greek people becoming convinced that those reforms will work and, therefore, be worth the pain that individuals and families would have to endure to achieve them. There is no reason, now, to suppose that Greek's own leaders are capable of either inspiring the necessary confidence in their people or actually achieving the necessary reforms.
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