Greek Fire, Part 14

As expected over the weekend, the bailout of Greece is officially on.

Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, said Jean-Claude Juncker after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percent and the International Monetary Fund contributes the rest. Greece agreed to budget measures worth 13 percent of gross domestic product. 

Budget measures.  Is that what they're calling a 13 percent spending cut across the board?  Greece's unions will fight this to the end, but it won't matter.  The real question is what country will have to be bailed out next, Portugal, Italy, Spain or someone else?  But as Tyler Durden points out, all this is doing is kicking the Grecian urn down the road. (How much does a Grecian Urn?  Not a whole hell of a lot!)

In essence Greece will go from having "only" a 133% Debt/GDP ratio to an insane 149% in 2013 before presumably dropping to 144% lower in 2014, still a good 11% higher than currently. Greece just got bailed out so it can get into even more debt! What psychopath of the Keynesian school thinks that this unbelievable trajectory is anything but a complete and utter waste of money? German, and US taxpayers, are merely giving Greece money so it can increase it debtor status with French and a few other European banks. To say that this is a viable solution is something that only those who bow at the altar of Alan Greenspan can do.

In other words,  the odds that Greece will need another Olympian bailout is all but assured.  The question is who will still be left to do it, especially after the other PIGS countries fold?