Late-night haggling in Athens has produced the appearance of a resolution to the debt crisis. But the new three-year bailout leaves democracy in deficit and a Greek economy on the floorThe technocrats sat up all night haggling at the Athens Hilton, crossing their t’s and dotting their decimal points. The Greek party emerged this morning to announce that they had struck a deal with the creditors. There is a three-year, €86bn bailout on the table, in place of brief bridging loans. The two sides are no longer slinging rhetoric at one another, but instead agreeing on specific actions with remarkable speed. An early Greek exit is looking less likely, and the casual observer might even imagine that the long and winding saga of the eurozone debt crisis is at last approaching resolution.Such hopes are deluded. For one thing, the deal may not be as solid as it looks. In the looking-glass eurozone world, technicalities are agreed in advance of the broad political terms, and Berlin – which still shows some interest in denting Alexis Tsipras’s political stock – was today playing for time, insisting that there was no rush in agreeing formal sign-off. More fundamentally, the structural weaknesses of the single currency and its democratic deficit both remain unaddressed. Fresh austerity will intensify, not alleviate, the desperate weakness of the Greek economy. The emerging deal may just about allow Mr Tsipras and Angela Merkel to wriggle out of tricky domestic scrapes, but only by allowing each to mislead their respective electorates. Continue reading...
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