Felix Salmon sees the new Greek bailout as an attempt to buy more time:
[T]he plan assumes that Greece’s politicians will stick to what they’ve agreed, and start selling off huge chunks of their country’s patrimony while at the same time imposing enormous budget cuts. Needless to say, there is no indication that Greece’s politicians are willing or able to do this, nor that Greece’s population will put up with such a thing. It could easily all fall apart within months; the chances of it gliding to success and a 120% debt-to-GDP ratio in 2020 have got to be de minimis.
What’s happening is that nobody is prepared to take the plunge into either of the paths that might eventually lead out of this: sustained aid (not loans) to Greece, or departure from the euro, leading eventually to higher competitiveness and faster growth. Both options would be politically catastrophic, which means that they can’t be taken until there is literally no alternative.
Yannis Palaiologos looks at the state of the Greek economy:
Looking further forward, the main worry is that the new program does little to tackle Greece’s depression, and will probably make it worse, at least in the short-run. The country, which has been in recession since 2008, saw its GDP fall by nearly 7 percent in 2011, and the economy is expected to contract by at least another 4 percent this year. Unemployment is already at 20.9 percent (including a staggering 48 percent for young people) and is going further up. The social fabric is badly frayed and the wider economic climate in Europe is poor (eurozone GDP fell by 0.3 percent, in the last quarter of 2011).
Kevin Drum believes that this bailout won't fix anything:
If Europe wants Greece to survive as part of the eurozone, its member countries are probably going to have to commit to a nearly open-ended flow of fiscal transfers, just as California is implicitly committed to an open-ended flow of fiscal transfers to Mississippi
Veronique de Rugy recommends default:
The bottom line is that Greece may be better off defaulting now — since it will happen at some point — rather than going through another bailout that’s almost sure to fail. I do understand why things are unfolding the way they are today, but a new bailout won’t help Greece. At the same, it isn’t realistic to ask countries to bail out Greece without guarantees that austerity measures will take place. The EU needs to let Greece default.
Ezra Klein takes a step back:
What policy wonks don't like to do is muddle along. But muddling along is, for the most part, how problems get solved. Particularly in Europe. Europe has been muddling along for years now, and this plan, if all goes well, buys them a few more years of muddling. And perhaps, by then, the global recovery will be stronger than we had thought, or the rest of Europe will be in a stronger position to help push Greece over the finish line. Or perhaps, a few years from now, Europe will just figure out a way to muddle along for a little while more.
Jamie Fuller expects more Greek drama:
March 20 will be an important milestone, but even then the eurozone won't be out of ulcer-inducing territory for months. As Olli Rehn, European monetary affairs commissioner, said after the 14-hour meeting that hammered out the bailout plan, “I have learnt that marathon is indeed a Greek word.”
Ryan Avent agrees:
No one thinks this is the final chapter of the euro-crisis story.