Wednesday, February 01, 2012

The Lord chuckled

With a long-awaited debt swap deal largely almost secured, Athens' focus is now squarely on the reform front. Failure to persuade lenders it can follow through on its pledges could put both the bond swap and the country's latest bailout at risk.

That is the Reuters "take" but The Guardian is suggesting that it very far from being a done deal. Prime minister Lucas Papademos is calling for a "crisis meeting" to ask backers for further concessions after "tough and honest' discussions in Brussels and Frankfurt".

The clue to the problem, though, is in the Reuters report. A senior Greek banker says a final accord on the bond swap was on hold until Athens could show it was "serious about tackling reforms".

"The debt swap agreement is ready, but it will not be announced before the end of the week and until the government has made certain commitments on reforms, labour issues and the pension system," says the anonymous banker. "By delaying the debt swap, European partners are putting pressure on the government and political leaders to make certain commitments".

But WSJ is getting bored with it all, and is just taking the mick:
And Angela Merkel said, "Let there be jobs and growth." And lo, there were jobs and there was growth. And Angela Merkel said, "Let there be closer fiscal coordination on a non-Treaty, intergovernmental basis with penalties for sinners to be administered by the European Court of Justice." And lo, there was that, too. And Angela Merkel said, "Let Greece prove itself capable of meaningful structural reforms before we give them another, €130 billion bailout".

And the Lord chuckled.
The truth is that no one really believes anything about Greece any more – the media goes through the motions of reporting the latest twists and turns, but the real agenda is default, the expectation still being "when not if". Then, there is Portugal, and we start all over again.