Those of us who wish that the euro be brought to an end before too many people get hurt are likely to be disappointed, because European politicians refuse to admit defeat.
Greece now stands on the brink of a sovereign default. Over the last few months, the slump in the Greek economy has been much deeper than anticipated, and, as a result, the Greek government is now in urgent need of roughly $20 billion to cover its immediate financing needs, on top of the rescue package of approximately $170 billion conferred in October of last year.
The government of Lucas Papademos is busy negotiating an orderly default with Greece’s main “troika” of lenders — the IMF, the European Commission, and the European Central Bank — as well as its private creditors. The October agreement counted on the writing off of some $130 billion worth of Greek debt held by foreign lenders, an amount equal to approximately 70 percent of the country’s total debt burden.