February 22, 2012
No triumphalism accompanied Greece's bailout and debt-restructuring deal hammered out early Tuesday; the euro zone's two-year debt crisis has seen too many false dawns.
Financial markets were somewhat cheered that months of negotiations aimed at cutting Greece's heavy debt had reached a resolution, largely putting to rest fears of a chaotic debt default next month. It also removed—at least for the immediate future—the gnawing anxiety that some policy makers in Germany and elsewhere are trying to oust Greece from the euro.
But the overriding reaction was of unease that this tough deal, which has already generated huge opposition among Greeks, is bound to fail. Many observers ask not if the program will fall apart, but when.
Euro-zone finance ministers on Tuesday forged a €130 billion ($171.9 billion) rescue deal that will see Greece's private creditors cut the face value of their bonds by 53.5% in a swap that will reduce the country's outstanding debt by €107 billion.
The deal will still leave Greece, in the best case, with a huge debt burden and enormous challenges to implement. "We've seen Greece derailing several times in the last two years," Dutch Finance Minister Jan Kees de Jager said Tuesday. "Implementation risks are very high in the case of Greece."
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