atomic_fungus (atomic_fungus) wrote,

#4804: The can got kicked again.

Everyone can chill out, because Greece is fixed. (Again.)

...for how long this time? A year? Two? All it's going to take is new elections and a new government, one that's more nationalist than Tspiras and his cohort, and then they'll be right back where they were.

Greece is in debt to the tune of some three hundred billion euros, with an annual GDP around $230 billion. This most recent deal is more loans, and Karl Denninger points out that this deal isn't going to fix anything because it merely increases Greece's debt.
Greece has about half of their GDP coming from government spending. This means close to 9% of every euro in GDP goes to those creditors and about 17% of the government's spending goes there too!
Basically it means that in order to pay down their debt in thirty years' time, Greece must shovel 26% of its annual GDP to its creditors.

In order for Greece to pay down its debt, though, it cannot spend in deficit.

That's the point that Denninger implies: not only must Greece pay about twenty billion euros per year to its creditors, but it must also not take on any new credit. That is what makes all this impossible; the greek people did not like the previous austerity measures and they are not going to like this, either.

The predictions I'm seeing say they've gotten themselves a couple of months' time out of this deal, after which things go to hell again. I guess we'll see.

* * *

Well, I've got 15 minutes before I have to start getting ready for work. I suppose if I'm going to tighten the Jeep's belt now'd be a good time to do it. I really hope I can get into the garage this "weekend" and get some stuff done. Cripes.

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