Greece Is The Word (Part III)

And here we are again……update Part III

 

With crunch time for Greece and the Greek people fast approaching (it only has enough cash to last until the end of this week), options to overcome the stalemate became increasingly straight forward:

 

1. Greece can borrow further money from the Eurozone as part of the pre-agreed bailout and accept the severe austerity measures that come with it. This is effectively Greece borrowing from the Eurozone to then make their debt repayments back to Eurozone countries and financial institutions.

 

2. Greece could refuse the austerity conditions and no money will be offered. Greece will then default on all its loans / bonds / promises to many Eurozone countries and financial institutions, which is likely to cause financial meltdown.

 

Some would argue that Greece holds all the aces here……but Germany are flexing their economic muscles very strongly and won’t be dictated to. The ‘middle ground’ appears to be no ‘man’s land’ at the moment.

 

So what option was taken?

 

In short, all parties agreed to delay a decision for 4 months to allow some thinking time / head space / me time and Greece would be thrown some pocket money to keep them going.

 

Not so much a solution……more a ‘put off until tomorrow and worry about it later’.

 

The longer term issue is whether Greece remains in the Eurozone at all. A Greek exit (‘Grexit’….you’ll be sick of this term over the next few months!) could be a good thing in the long term if a favourable economic development plan for all parties can be agreed.

 

If only this had happened 5 years ago……Greece and the Eurozone would be in a much better place by now.