Greek crisis defies easy solution

Even as it awaits a $17bn joint EU-IMF loan, there are doubts about country’s ability to repay debts.

Greece thumb

Euro zone finance ministers are set to approve the release of $17bn for Greece.

This is the fifth portion of aid from a $160bn bailout from the European Union and the International Monetary Fund – made possible by the austerity laws the Greek parliament passed this week.

However, there is no certainty in the long-term benefit of the bailout, as Greece’s mechanisms to repay the loan are still unclear.

John Sfakianakis is the chief economist at Banque Saudi Fransi. Speaking to Al Jazeera from Riyadh, he said he did not think the debt was repayable.

“There is no doubt in my mind that for the size of Greece the debt, now which is going to be close to 200 per cent of its economy, it’s not going to be repayable.”

He said he thought Greece would “be defaulting in the next six months”.

Sfakianakis said the issue is not how Greece is going to overcome the crisis because of the large size of their debt accumulation, but rather what happens to the other countries suffering a similar fate in the EU bloc.

“The issue is at what point will Europe or the EU be at six months or nine months from now? Will they be over with their own crisis?”

“Will Spain and Italy require less assistance from the EU? Will markets be punishing those countries? Or will they be more comfortable with those countries?”

Al Jazeera’s Laurence Lee reports.


Source: Al Jazeera