The Greek crisis can revert to being just a big problem—for the time beingby George Magnus / August 11, 2015 / Leave a comment
The third bailout deal for Greece may yet turn out to be like the punishment meted out to Sisyphus, or it may yet collapse and end up with Greece leaving the eurozone. It has come as a shock to many that some sort of bailout phoenix has risen from what seemed like July’s ashes of distrust and despair. A three-year deal, worth up to €86bn, still has details to be ironed out and has to be approved by European finance ministers, and the Greek parliament. It then has to be endorsed by eurozone governments or ratified by some parliaments, including the German Bundestag.
But as things stand, a deal could be in place by 20th August when Greece has to make a payment of just over €3bn to the European Central Bank. This could be in the form of a short-term bridging loan, if necessary, or it could be the first tranche of the bailout, but either way, the Greek crisis can revert to being a big problem—for the time being. Stopping it becoming a full-blown crisis again will depend on solving the predicament of the Greek banks, some form of debt restructuring and the tangled web of Greek politics.
It had seemed as though so-called “prior actions” were going to cause further acrimony between…