Greece's German diet 'all a question of dosage'

Page last updated at 14:53 GMT, Sunday, February 19, 2012 - 19:53 EST

CTV.ca:

When euro zone finance ministers gather in Brussels on Monday afternoon, they are expected at long last to sign off on the €130-billion ($170-billion) bailout needed to keep insolvent Greece from defaulting on its mountain of debt. Of course, nothing is certain when it comes to this fractious lot, and the deal could still come unglued. Which is why the oft-repeated headline “Greek debt deal closer” prompts outbreaks of laughter on bond desks.

But the Germans, who will have to foot a big chunk of the bill, appear satisfied that they have squeezed the Greeks as much as they can. Greek political leaders of all stripes have bowed to the inevitable and made the necessary promises, in writing, of better fiscal behaviour. And other members of the club who would rather cut their losses and let Greece fend for itself appear to have packed away their vials of vitriol for now.

So, after seven months of often bitter wrangling, Athens will get its payday loan, private bondholders will reluctantly sit still for their “voluntary” 70-per-cent shearing and the European Central Bank will engage in a €50-billion bond-swapping scheme designed to keep it free of any such debt restructurings.

Needless to say, none of this will fix Greece’s deepening economic and structural woes. And the enforced austerity is sure to make a bad situation worse.

Read the whole story: CTV.ca