Reaching an agreement on Greece’s bailout is beyond the 11th hour. It’s striking midnight.
Monday all eurozone presidents and prime ministers have been summoned to meet in Brussels in a final attempt to resolve Greece’s bailout stand-off. This confab is necessary because the finance ministers of the currency union failed to reach an agreement earlier this week.
Prospects are not good for an agreement, and analysts–even those outside Greece–are already saying the Greeks would be better off leaving the eurozone, which means abandoning the euro, and re-establishing the drachma.
The Syriza party was victorious in proclaiming a hard line against the austerity program that the eurozone authorities want Greece to implement. Actually, Greece already installed an austerity program, but it did not produce the revenue needed to meet the country’s needs, and Brussels wants an even more draconian program before extending more bailout money.
If Greece exits the eurozone, it’s a crack in the dam. Other smaller nations that are also in financial straits may follow suit, thereby jeopardizing the European Union concept.
Economically, Greece is small potatoes in the eurozone, but an exit would set an unwanted precedent that other weak, southern-periphery countries could view as viable.
I look for a conciliatory tone coming out of the meeting next week, but will it be enough to satisfy the Syriza party members who want relief from the existing austerity program?