Times
May 11, 2011
If you're watching recent developments in Europe with an uneasy feeling of déjà vu, you have good reason. It was almost exactly a year ago that the European Union stepped in with a 110 billion euro ($158 billion) bailout for debt-plagued Greece. Yet here we are, a year later, and Greece's debt is again the primary focus of Europe's policymakers. A meeting of euro zone officials conceded last week that the current bailout was insufficient. Now there's talk that Greece might get a whole new rescue deal, possibly including eased lending terms and reform commitments, which would increase the program's chances of success, as well as fresh bailout funds. The Wall Street Journal is reporting that Greece may require an additional 60 billion euros ($86 billion) to cover its financing needs in coming years.
Nothing is final yet, but a do-over on the Greek bailout appears inevitable. European leaders are finally conceding what everyone else on the planet already knew – that last year's Greek bailout was little more than a delaying tactic on the route towards a real reckoning. The momentum towards effectively trashing the old arrangement is also symbolic of the growing realization in European capitals that the initial steps taken to resolve the euro zone's debt crisis fell far short of what was necessary.
That's positive of course, but at the same time, an overhaul of Greece's bailout could cause potential ugliness for not just Europe, but the entire global economy as well. The fact is that Greece's debt problem is still very much a problem for all of us.
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