March 16th, 2012
06:25 PM GMT
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London (CNN) – The bail-out is a done deal, the International Monetary Fund has agreed its share and the Europeans have started to hand over the money. One of the ratings agencies has even upgraded the new Greek bonds.

So it is incredibly dispiriting to be reading more and more notes from economists and analysts suggesting that this is not over yet.

Paul Donovan, in his note from UBS, noted that the markets were not that impressed by the state of play. The markets, he said, were pricing in “the debate about when the next restructuring will take place.”

According to Societe Generale, it is "only a matter of time before Greece will need an additional package." Citigroup reflects the same view, noting: “In our view, Greece requires further official funding beyond at least 2014, and we also see the need of further debt restructuring in order to get the country back on a sustainable fiscal path.”

It gets worse with the prognosis "the risk of Greece exiting the euro area remains elevated (around 50%)."

Hang on. "Next restructuring?" and "further debt restructuring?" What on earth have we been going through for the past three months if this isn’t going to solve the Greece problem once and for all?

You would be forgiven for a certain incredulity, given that no sooner is the ink dry on the checks being sent to Athens than the economists who know about these things say it’s not enough.

This is made all the more likely by European politicians who continue to call for even more austerity in Greece. This lemon is just about squeezed out, and if they don’t want to be facing riot and mayhem they would do well to recognize this.

This comes as Iceland announced it is paying back 20% of its IMF loans early. Yes….I said early. Iceland. Which also introduced austerity and borrowed money but - notably - let the banks go bust.

No one ever said going bankrupt was easy, but it still may have been the best solution for Greece rather than this messy, half-baked solution we are now witnessing.



soundoff (22 Responses)
  1. EVANGELOS ILIAKIS

    I THINK THAT GREECE IT'S ON THE ROAD TO RECOVERY. TRYING IS THE BEST SOLUTION AND THAT EXACTLY WHAT ALL GREEKS ARE DOING AT THE PRESANT TIME. W O R L D LETS GIVE A CHANCE TO G R E E C E.

    March 16, 2012 at 7:07 pm |
  2. Max

    Pure speculation CNN. You like to speculate negatively about China and Europe don`t you. Why don`t you start writing real articles. Like about the 50 million Americans on Food Stamps and the roughly 50 Million Americans without health insurance.

    March 16, 2012 at 7:28 pm |
  3. Mike Angelou

    Do we have to be creating uncertainty again? Give the country a chance to get back on its feet. Yes, there are other "solutions" too, but this is the one that was chosen and it has to be supported. Unless there is some other reason for all this at the end of the tunnel.....

    March 16, 2012 at 8:27 pm |
  4. Melinda Bains

    Good Bye Yellow Brick road – Johnny boy had it right heheheheheheh. No More Gold for Greece even though Germany took it all during WWII

    March 16, 2012 at 10:05 pm |
  5. CraigNL

    Today the IMF released a report which concluded that billions more are needed to keep Greece from going default and keep it in the Euro-zone. Naturally doom scenarios accompany this conclusion. I say enough is enough. If Greece has any pride at all, she will leave the Euro as well as the EU instead of taking tax-money of people in other EU countries that had nothing to do with the problems Greece created. Solidarity, for me, stops here.

    March 16, 2012 at 10:06 pm |
  6. Tom Taylor

    Can anybody explain how a small nation without rich natural resources and an anonymous industry will be able to pay its debts in the future ?

    March 16, 2012 at 10:48 pm |
  7. Chris

    Good point about Iceland having let the banks go under. We should have done the same thing here in the US. There would have been a difficult year or two as the dust settled, but by now we'd have a firm foundation to grow our economy again. Instead we continue to struggle forward without fixing any of the underlying problems, we've rewarded the bad actors, and the next financial crisis will be even worse (and likely beyond our ability to control the outcome).

    March 16, 2012 at 10:56 pm |
  8. Jana

    Greeve has absolutely no future in Eurozone and in the EU for that matter. It does not belong there , pure and simple, cheated their way into both. It is very sad that the EU politicians cannot see this and stop wasting their taxpayers money. Greece's nazi policy toward Macedonia should be enough proof Greece does not belong in the club.

    March 16, 2012 at 10:57 pm |
  9. Marcel

    I believe where not in a crisis, but in an economic warfare by the banks. In this warfare wich is already goin on for like 4 years we will see nations fall and nations rise. The new pick order wil be set for the next 60 years in the coming years. Where is the money of the world goin too, and wich countrie wil have the most powerfull thinking machines in this warfare that is about loans, debts and credibilty?

    March 16, 2012 at 11:10 pm |
  10. Sakis

    Heil Jana!

    March 16, 2012 at 11:38 pm |
  11. Floyd Burgoz

    All for the elite of the world in terms of saving the investors bottom line. And it will continue. You can not save a touristic based economy, it defies all financial common sense. Generational change and mind set will prevail but that will take 15 to 25 years in near term fallout.

    March 17, 2012 at 12:11 am |
  12. DRB

    Is this a joke? Did you run the comments about Iceland by anyone who knows anything about economics? Do you even care? Iceland is doing well because it seriously devalued its currency by using massively loose monetary policy. Greece does not have that choice because it is in a currency union and does not control its own currency. Iceland did not borrow money; they printed it. They did not impose austerity measures similar to the European states. Throwing a red herring comment about their banking system completely misrepresents the situation. Is there no editor that can google "iceland austerity?" before publishing this article?

    March 17, 2012 at 1:54 am |
  13. dumb article

    Was this article even thought out? Or was the writer obviously not aware of the implications of bankruptcy with the mere offhand suggestion as a possible solution?? i dont think so.

    March 17, 2012 at 2:01 am |
  14. defff

    no, and it will never be enough. greece will default, its just a matter of when and how. 1 in 4 workers in greece works for the government. they are unionized and hold the country's vital services hostage unless they get paid more and more. well, they killed the golden goose, and the greek taxpayer can no longer afford to support them

    March 17, 2012 at 2:57 am |
  15. Harry

    Jana – the above article is about economics, not a platform to air support for a psuedo state

    March 17, 2012 at 4:55 am |
  16. Jana

    Harry, Greece is a pseudo state if ever there was one.....Macedonia has a total debt to GDP ratio of 25 % , with budget deficit constantly kept below 2.5 %. ( one of the two lowest in Europe) ...and steady growth , small but steady, which is remarkable keeping in mind EU is the primary .export market. And Harry...how many sovereign defaults does it take to realize a country is a pseudo state? This current default (it is default, no matter what fancy name you call it) is Greece sixth ( or maybe seventh?) since the country was artificially created in 1830. You still call yourself an economist Harry?

    March 17, 2012 at 10:56 pm |
  17. bad article

    publishing this article solely for the sake of publishing, without having new insight,

    March 18, 2012 at 1:14 am |
  18. Rich

    Only an idiot or a Euro politician would ever have actually believed they solved the problem.

    March 19, 2012 at 4:00 am |
  19. polecat

    It's easy... everyone wanted the help, rescue or bailout because they wanted to collect their money and GET OUT of there... this rescue was to pay and save others not for the Greece's people... Now Greece needs more money to develop something sustainable 1+1=2

    March 20, 2012 at 5:35 am |
  20. Jonaz

    You cannot compare a Viking nation – Iceland, with a whiner nation – Greece. Of course Iceland would pull itself together and Greece wouldn’t. Just look at the corrupt fat*ss toad the Greeks has put in charge.

    March 20, 2012 at 7:22 pm |
  21. leo

    We keep on hearing this bailout is not enough, Greece is a pseudo state etc. Nobody really wants to hear the truth in that the IMF the EU and the criminal PASOK government conspired in the execution of an unprecedented socio-economic experiment of relentless austerity and extremely unfair taxation that has all but destroyed the Greek economy and the ability of Greeks to repay their debts. Of course these incompetent fools will never admit that they messed it up and will continue the same recipe that will eventually kill the patient. That recipe involves the destruction of the once thriving private sector and, despite what you hear to the contrary, the preservation of the idle and cancerous public sector. I will give you two facts to illustrate this. 1. Before 2007 the main wealth producing sectors of the Greek economy were tourism and real estate. Real estate is all but finished now. Taxed to oblivion and burdened with dozens of useless new regulations the real estate market is dead. Billions of euros in possible tax revenues are lost for ever. 2. My personal income in 2009 was about 11000 euros for which taxes & NI of 3700 was paid. In 2011 my income was about 10000 euros but my combined tax + NI bill is going to exceed 7500 euros. Please tell me how could the economy recover if I have no money to buy anything not even food. Thank you for listening.

    March 20, 2012 at 11:01 pm |

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