Issue of the week: shockwaves from greece’s meltdown

Greece finally got its bailout, said Charles Forelle in _The Wall Street Journal,_ but it might be too little, too late. With Greece lurching toward insolvency, the European Union and the

International Monetary Fund this week came through with a $147 billion loan package. That “will solve one pressing problem”: Greece will be able to repay an $11 billion bond that comes due

next week. But over the longer term, Greece will need to tap the public markets for an estimated $196 billion to fund its budget deficit and repay the massive debt it has been accumulating

for years. And there’s no assurance that investors will play along. Many worry that Greek voters will reject the $39 billion in budget and service cuts that the Greek government promised in

exchange for the bailout. There is every reason to be skeptical, said David Ignatius in _The Washington Post._ Greece has spent decades in a “financial never-land,” turning a blind eye to

widespread corruption and tax evasion. It doesn’t seem plausible that the “freewheeling, boisterous” Greeks will suddenly adopt the “more uptight, less spendthrift ways” of northern Europe.

Investors’ worries aren’t confined to Greece, said Dan Bilefsky and David Jolly in _The New York Times._ Markets throughout Europe plunged this week on fears that Spain, which suffers from

its own soaring deficit and an unemployment rate of 20 percent, “might also require a Greek-style bailout.” Clearly, Europe’s debt crisis is far from over, said _Investor’s Business Daily_

in an editorial. “Virtually every country in the EU spends more than it takes in, and has made long-term fiscal promises to its aging workforce that it can’t keep.” The Greek bailout, in

fact, could further undermine Europe’s finances, by weakening the resolve of other European countries to exercise fiscal discipline, said John Tamny in _RealClearMarkets.com._ Greece has a

long history of flouting the budgetary rules imposed on the countries of the Euro bloc, and for its defiance, it was rewarded with a bailout. So why would Spain, say, impose unpopular

austerity measures, when it can just keep spending and wait for a bailout? “Thanks to the unnecessary bailout of Greece, profligate governments renowned for waste will continue to destroy

limited capital,” while private companies scramble for funds. SUBSCRIBE TO THE WEEK Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE SIGN UP FOR THE WEEK'S FREE NEWSLETTERS From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox. The euro is sliding along with confidence in Europe’s fiscal

discipline, said Paul LaMonica in _CNNmoney.com._ So far this year, the currency has lost about 8 percent of its value against the dollar, and the announcement of the Greek bailout didn’t

arrest its plunge. It’s plain that “investors think that the Greek bailout doesn’t completely end Europe’s debt woes.” If Spain can’t quickly eliminate its own debt problems, the euro could

be in for further battering. A free daily email with the biggest news stories of the day – and the best features from TheWeek.com