Inside Track
Greece Needs Another Bailout; Disagreement Threatens EU Itself
The report on Greece’s financial condition issued by the International Monetary Fund (IMF) on February 6 was dismal, but, said the central bank, its future remains bright. The EU member will fall far short of the budget-surplus targets put in place in order to get the last bailout. The Greek economy must grow at 3.1 percent, but it expanded by only 0.4 percent last year.
Germany and the IMF would partner in any new loan granted to Greece (in addition to the $92 billion it’s already receiving from other EU countries), and German Chancellor Angela Merkel is up for reelection in March. She is under pressure from citizens already unhappy about the bad debt Germany has had to write off for Greece, and, worse, an increasing populist resentment that Germany is helping Greece out of its own self-inflicted financial difficulties.
This comes at a critical moment in the history of the EU. Aside from the challenge Merkel is facing from disaffected citizens over continued bailouts of a country considered to be weak, corrupt, and politically unable to manage its affairs properly, the pall of Brexit hangs over the agglomeration. Plus, the United States is a major funder of the IMF, and fears that President Donald Trump may pull the plug on that funding are increasing. In October 2012, Trump tweeted: “Greece should get out of the euro & go back to their own currency — they are just wasting time.” Now that Trump is president, Greece and its bailors are wasting not only time but American taxpayer monies as well.
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