Greek Crisis Still Simmering

The Greek crisis is still far from being solved with Athens struggling to implement the reforms it promised in order to receive the latest round of bailouts from the European Union. So far, Greece has only followed through on 14 out of the 48 reforms needed to receive the €86 billion (us$95 billion) promised in the third bailout agreement made in August. Süddeutsche Zeitung reported on Tuesday that European creditors are planning to delay the October payment of $3.3 billion, with the planned $27.6 billion bailout payment to recapitalize Greece’s banks also in jeopardy.

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The International Monetary Fund (imf), however, is warning that Greece’s EU creditors must also do more. Their officials, who are currently in Greece reviewing progress on the promised reforms, have said the imf would not participate in the bailout unless Greece delivers in implementing the promised reform. But top imf officials have also warned that the eurozone must reduce Greece’s debt burden—effectively forgiving some Greek debt.

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Germany’s victory over Greece in the showdown over the summer only brought a temporary reprieve. There are long-term, fundamental causes for the crisis in Greece, and these Band-Aid bailouts solve none of them.

The only way for the eurozone to fix these problems is to create a new political union—to transform the single currency area into a superstate. For more background on why this is the case, and what this superstate will look like, read our article “Why the Euro Is Heading for an Earthshaking Crisis.” ▪

Full article: Greek Crisis Still Simmering (The Trumpet)