A rose for Athens?

The debt swap is relieving the Greek government of only 107 bn euros of its total debt of 360 bn euros. So,here on,the onus is altogether on the Greeks and it can still be all downhill. Since the investors are not taking the losses voluntarily,the deal could be a credit event,thereby still being technically a default. But it gives everybody certainly the markets a necessary breather. The bailout is conditioned on further austerity measures for what was a disproportionately reckless economy,which has shrunk 16 per cent in four years. Thats why,some economists fear more austerity including spending cuts of 1.5 per cent of GDP,cuts in pension,government jobs,minimum wage,as well as labour market reform can only weaken demand and damage an economy that has nothing more to yield,with no prospect for any growth till 2014.

Greece goes for polls in April,and the government hated for this prolonged pain is likely to be voted out. But the alternative to this economic hardship and socio-political upheaval is for Greece to leave the euro and face disaster. This tragedy is not of Greek origin,and the EU powerhouses have a lot to answer for. But a global economy on the brink has been hoping Europe wouldnt come unravelled in Greece,where it all began so long ago.