Expect another Greek fudge – MoneyWeek

Youcanseewhy,saidDerSpiegel。

“ItwouldbegeneroustorefertotheGreeks’approachtoreformsassluggish。

”Foronething,manypeopleevidentlystillseemtothinkthatpayingtaxisoptional。

Thentherewastheprivatisationprogramme,trumpetedasthebiggestofalltime。

Itwassupposedtoraise€50bnbyfloggingstate-ownedassets,butsofararound€1。

5bnhasbeencollected。

Moreover,theworryisthattheeconomy“iscollapsingmorequicklythanEuropecanmendit”,saidtheWallStreetJournal。

AssumingGreecegetsthemoney,thefearisthatitwillsoonneedmore,orhavetorestructureitsdebtagain。

That’sbecausethegrowthassumptionsunderpinningtherescuelookincreasinglyshaky。

“Theviciousspiralofausterityisstillworking,”saidHugoDixononBreakingviews。

Fiscalsqueezesunderminegrowthandtaxreceipts,makingthedebtproblemworse。

Theeconomyissettoshrinkforasixthyear,leavingGDPaboutaquarterbelowitspre-crisispeak。

Thegovernmentexpectstheoveralldebtpiletoreach179%ofGDPnextyear。

Eventhoughitschancesofevergettingontopofitsdebtlookminiscule,Greecewillprobablybegivenmoretimeormoney。

TheconsequencesofaGreekdefaultandexitfromtheeurozonelook“incalculable”,asDerSpiegelpointedout。

AkeydangerisacollapseofsouthernbankingsystemsascapitalfleestothenorthfromcountriesthatcouldfollowGreeceintodefault。

Inanycase,therestofEurope“isterrified”atthepotential“domino”effectofa‘Grexit’。

SoeventhoughGreecehasn’tmetthetroika’sterms,“Isuspectsomefudgewillbeagreedintheend”,saidBenMayofCapitalEconomics。

ButgivenhowfastGreeceissinkingintothemire,itwon’tbetoolongbeforeprocrastinatingpolicymakersagainfeel“agloomysenseofdéjàvu”。

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