Monday, February 13, 2012

Next steps for Greece

by Stephanie Flanders

BBC News

February 13, 2012

With Sunday's vote in the Greek parliament, the country's 130bn-euro ($170bn; £110bn) "rescue" from the European Union and the IMF has lived to fight another day.

But there are plenty more steps to go before Greece can obtain the first tranche of that new bailout money and make that crucial debt repayment in five weeks time.

You don't have to spend much time examining the country's budget, or its economy, to see that making that payment is the least of it.

Even with the 130bn-euro programme in place, it's difficult to find a reputable economist who thinks Greece's stock of public debt is sustainable.

As it happens, the so-called troika who overseee the bailout - the IMF, European Central Bank and the European Commission - are due to present their answer to that question this week, possibly in time for the meeting of eurozone finance ministers which will consider whether Greece has now, finally, done enough to qualify for more support.

I do not know what that troika's debt report will say. But I can confidently predict that Greek debt as a share of GDP will be higher than it was the last time. It always is.

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