Wednesday, February 08, 2012

Why Are They Still Messing With Greece?

Greece's broken promises anger EU partners | Reuters
Nearly two years into Greece's bailout, so many promises have been broken that international lenders have largely lost faith in the country's will to reform itself and are torn between imposing stricter outside control and cutting Athens loose.
It isn't just the bond-holders they have lied to.

They pass laws that the EU, ECB and IMF demand, but the laws are never implemented. Taxes aren't being collected. (It's no wonder there is a revenue problem.) Promises to privatize state-owned businesses have not been kept. And the folks in Athens act like nothing really needs to change.
Aside from major structural reforms, it is flagrant cases of excessive spending that euro zone capitals most want to see cut - such as the fact that there are 25,000 state-supplied cars on the national budget, according to a senior Greek lawmaker.
The party in Athens just rolls on.

And under the heading, "The leopard cannot change his spots,"
The IMF's chief inspector for Greece, Poul Thomsen, said recently that Greece's lenders may have over-estimated the capacity of the administration to reform.
Cuts to government payrolls? Not done. Collect taxes? Also not done. Work-rule modernization. Completely not done. (You want to upset the unions right before an election? Are you crazy?)

The only real question is why the brain trust that lent all this money to Greece can't see that waiting for them to change now is a losing proposition. They should just cut their losses.


Kevin said...

The rest of EUrope is terrified of that first domino falling.

Zendo Deb said...

That domino has already hit the next 2. They are in default. It is clear that they will not be meeting their bond obligations.

It is even more clear that they won't be able to meet their bond obligations for some time to come.

And it is even more clear that they have no idea what the term "reality" signifies.