What Is Next For Greece?

Leonid Bershidsky, Bloomberg: Would You Lend Greece $60 Billion?

Keeping Greece within the euro zone and the European Union is a political question. Yet it's also about money, and it may be worthwhile to consider how Europe would act if it were a bank confronted with a big delinquent debtor.

This would be an easy question to answer if the choice were merely between a Greek default on all of its debt and a write-off of some portion. Something is better than nothing. Yet the situation is more complicated: Greece wants 53.5 billion euros (almost $60 billion) over the next three years. Would a banker lend that sum to retain a chance of hanging on to some of the money already invested?

Calculating how much European countries would lose if Greece were cut off is not straightforward. They are seriously exposed to Greece in four ways: through straight bilateral loans issued as part of the first bailout in 2010, through guarantees on loans issued by the European Financial Stability Facility and the EU bailout fund, through the European Central Bank's holdings of Greek bonds and through Target2, the ECB's settlement system in which all euro members have outstanding claims on Greece.

WNU Editor: Greece is now demanding almost $100 billion in new loads .... Greece's tab for new bailout could reach $96 billion (CNN). Predictably .... no one is happy .... Anger erupts over Greek rescue plan (Washington Post). And for the Greeks who overwhelmingly voted against this austerity plan last week .... and that is now about to be imposed on them whether they want it or not .... they are in shock .... Greek Debt Crisis: In Athens, Jubilation Gives Way to Dismay and Confusion (WSJ). My prediction .... Greece has no choice .... without this bailout agreement Greece's banking system will utterly collapse .... and Greece is not ready or even remotely prepared for that outcome. What is also worrying the Greek government is that this is the week that all government employees are to be paid .... but with no money in the banks .... getting paid is going to be next to impossible.