The EU/IMF bailout of Greece seems to be gaining steam; apparently the heads of the European Central Bank and the IMF gave speeches to the German parlaiment detailing exactly what would happen if Greece were to default (Lehman 2.0). This apparently frightened enough of them to increase the Greek aid package to some $160 billion, which now looks like it's sure to pass the Bundestag. In theory, this should be enough to get Greece thru for the next few years. In exchange, Greece has promised some painful cuts to public servant salaries and higher taxes (rumored 25% hike in the VAT). I'm mildly hopeful this will be enough to contain the crisis, which this has now become, at least in the short term. On a longer term, however, one cannot solve a problem of too much debt with more of it; given enough time, this Greek tragedy only has one ending: default and crisis. Others are not so optimistic even in the short term, especially given that there are still several hurdles which must be passed by May 19th. Here's is an article which sums up the mess, only this is with a distinctly pessimistic flavor. It's written by Greg Weldon for John Mauldin, both of whom are very sharp gentleman, which is why it's rather disturbing:
"There are no good solutions here, only very difficult ones. In order to get financing, Greece must willingly put itself into a multi-year depression. And borrowing more money when it cannot afford to pay back what it already owes will not solve the problem. 61% of Greeks now favor leaving the euro"