Greece Still Not on a Sustainable Path
The new deal might work in the short run, but Greece is far from making the necessary changes to bring the country's economy back.
This week felt like deja vu all over again. The European Union, European Central Bank, and International Monetary Fund demand Greece adopt a new set of deep austerity measures in terms for short-term aid. After a fair amount of posturing on both sides, Greece looks poised to acquiesce to the demands and its inevitable default is pushed out for a few more weeks.
We've seen this before, and playing this game over and over again has certainly bought some time for Europe. However, the austerity measures are just providing some short-term cover, not producing sustainable structural changes. In order for the long-term view for Greece to improve, Europe must sell structural changes to the Greeks or find a way to let the country leave the common currency.