French President, Francois Hollande - "We also had to show that Europe is capable of solving a crisis that has menaced the eurozone for several years," he said. And so, there you have it. Problem solved! The Plan is now clear - push countries to the brink of exit from the Eurozone, then come up with yet another bailout for an obviously bankrupt country at literally the "minus 13" day moment, as Greece has been technically in default on its debt to the IMF for almost two weeks.
The tentative deal will see €86bn go to Greece to cover its debts over the next three years. Of this, at least €25bn will go to recapitalize its banks. It seems at this early point - the news is 13 minutes old - that not one penny will go to debt reduction, without which Greece will remain bankrupt and unable to finance let alone pay its debts on its own. Greece has about 48 hours to pass the required changes to its pension system, tax system and other reforms to secure the new cash. Other European nations must also approve the third massive bailout to Greece in 5 years. Who wins?
Europe wins, for now. It gets three more years to realize it needs a different approach to deal with bankrupt countries in their midst. The IMF and Greece's other creditors also win, for now. They get paid for a while more. With this, the bankers win. They will get their bonuses this year. Who loses?
Greece loses. The referendum of last week seems to have meant nothing. Greeks resoundingly rejected austerity, and if anything, the vote was a rejection of how Europe operates. They got austerity and the way that Europe operates, unchanged. But their parliament still needs to approve this deal. We shall see.
Europe loses. It thinks that it has bought itself three years. In fact, this may turn into a delay of only two months as the Portuguese start voting in about ten weeks from now. One has to think that opponents of austerity in that country, and in Spain, will point to Greece as an example of how international bankers intend to bully and humiliate small countries in order to extract every single pound of flesh they can until they are paid, regardless of the situation. They would be right in that.
Worse, the great as yet untold story in Europe may not be the Euro, but the rekindling of national pride on a continent that is supposed to be all about "happy, happy, joy, joy" after a century of unprecedented bloodshed and slaughter driven by a nationalism gone insane.
Finally, we all lose. The day of reckoning that is coming, where the planet finally goes through the pain of dealing with unsustainable sovereign debt in many nations throughout the world, but this day has been put off again, likely deepening the crisis we will inevitably face. Ukraine and Puerto Rico may dominate the headlines next. Then Portugal again...then Spain again...then Greece again...then....?
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