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Tuesday, May 31, 2011

The Greek Tragedy - Update

The FT reports that the EU is considering another bailout of the embattled Greek economy, which could include outside intervention in the Greek economy (eg in tax collection and the privatisation of state assets).

Allegedly, around Euro30BN of the new bailout could be raised from privatisation and a change in repayment terms for private debtholders.

All very well, in theory. However, those putting together the rescue package all need to agree on the terms and conditions (not that likely) and the Greek people need to be prepared to submit to further austerity measures (highly unlikely).

The alternatives of default and/or leaving the Euro are not palatable, but are nonetheless very real possibilities.

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