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Monday, February 13, 2012

I Repeat: There Is No Greek Solution

The press announced another agreement. The markets rose. The Greek parliament approved more austerity measures demanded by the troika of international agencies to release the next tranche of Greece’s bailout funds. Maybe Greece will indeed get some more international money to stave off default, but this will be a temporary band-aid.

It is too late for Greece.  Greece is no longer governable.  Angry crowds will get angrier and larger. There will be general strikes. With an upcoming election, any parliamentary candidate who backs the austerity program will lose. Greek politicians can promise the Germans, the IMF, and the European Central Bank austerity until they are blue in the face, but they will prove impotent in the face of  public anger and intransigence.

Greece has held on so long by making promises it cannot keep, which its European neighbors pretend to believe. This farce is coming to an end. Either Europe must decide to look the other way and unconditionally bail out Greece or let Greece default. Both outcomes are bad, but the choice must be made and soon.

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