Europe's Harsh Deal Puts Greece Into Receivership And Avoids Contagion

The EU has wisely made the Greece deal so unpalatable that other countries with tottering public finances in similar need of reform are not tempted by contagion to follow in Greece’s footsteps. After seeing Greece’s terms, it is doubtful that Cyprus, Portugal or Spain will wish to do what Greece did.

By my count, Greece’s outstanding debt will soon rise to more than $350 billion. The EU meanwhile resists making available, by comparison, tiny funds for embattled Ukraine to survive economically despite its fighting a hot war on Europe’s behalf.

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Greece Has Chosen to Become a Banana Republic With its No Vote

It was an in-your-face message to the country’s creditors (largely the European Union, the European Central Bank and the International Monetary Fund) that Greece won’t be lectured on repaying debts or pension reform anymore. And it leaves the Troika with few options at tomorrow’s emergency summit—either cut Greece loose and accept the consequences, or give in to the country’s demands.

Not much of a choice, given that if the EU caves, it reads like an open invitation to countries like Cyprus, Portugal, Spain and Italy to do exactly what Greece has done. Since when is the Eurozone a transfer union? It cannot be expected to shift funds from high-productivity countries that keep their public finance in order to poorer ones that don’t. There’s a lesson to be learned here, lest the EU blows its chance.


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Greece Got Only Promises, No Money, from its Friend Mr. Putin

A victim of Putin’s typical negotiating tactics, Tsipras left St. Petersburg with an offer of money from a project that might never be completed. Yet Putin got what he wanted: Tsipras was on record as opposing the extension of EU sanctions against Russia.

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