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Recently, European leaders gathered in Brussels for an “informal summit.” Afterwards, Euro dropped sharply as fears took toll.
After a series of political shifts in Europe, the old plans are history, but new plans are missing.
Amidst a historical five-year contraction, Greeks will be heading to the polls again in mid-June. Meanwhile, finance ministers in the Eurozone are smiling optimistically but preparing contingency plans for the Greek exit.
With the onset of the Euro crisis in spring 2010, it was clear that the Greek challenges could not be resolved without debt restructuring.
In May 2010, the Eurozone supported Greece with €110 billion; last year Athens hoped to stay afloat with another bailout round of €109 billion.
Neither will suffice.
Actually, the endgame began in October 2011, when the Troika - European Commission, European Central Bank and the IMF - concluded in its debt sustainability study that Greece will need another €250 billion in the next decade.
Altogether, Greece will absorb more than half a trillion euros ($610bn) in a decade. The best it can hope is to have a debt-to-GDP ratio of more than 120% in 2021 – a level that got Italy into trouble last fall.
Political earthquakes
After recent elections, the Eurozone endgame is shifting.
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