What on earth do I know, but it seems to me that despite the recent announcements Greece is still headed for default. The head of Pimco says the deal doesn’t really go far enough:
Mohamed El-Erian, chief executive and co-chief investment officer at Pacific Investment Management Co., said the firm wouldn’t buy Greece debt until there is a sustainable solution to the economic situation in the nation. El-Erian commented on Bloomberg Radio.
Meanwhile, in Greece striking civil servants are clashing with riot police over the austerity measures that have been announced. The crux of the matter is that Greece seems to have already over-promised austerity relative to what can be done and under-promised austerity relative to what would bring about solvency. Meanwhile, though it’s clear that Greek default would be worse than Greek austerity for France and Germany it’s not clear to me that Greek default would be worse than Greek austerity for Greece.