The sun, the sea, the nerve-racking speculation. It's no wonder a miffed and rankled Greek Prime Minister George Papandreou took to a sudden outburst over the weekend, lambasting pesky "rabble-rousers" for "criminal" attempts to undercut his government's bid to fix the country's broken economy. "Leave Greece alone," Mr. Papandreou said. "Let Greece do its job."
Well, is it? Late Friday, Der Spiegel published an online report claiming Greece was considering ditching the euro as a way out of its devastating debt woes .
The story -- published as a clutch of cardinal euro zone officials were en route to a Luxembourg locale to secretly brainstorm contingency strategies for Greece's debt crisis -- spooked international markets. Rumours flared and the euro plummeted only to ease off a bit after a deluge of statements issued from Berlin, Brussels and Athens denied Greece's purported euro-exit plan as a "joke."
That Greece, though, is slipping far behind its slated fiscal targets a year after winning a $148-billion bailout from the European Union and International Monetary Union, is no laughing matter. On Saturday, a grim-faced George Papaconstantinou, Greece's finance minister, fell short of admitting that Athens would not be able to access international markets next year, thus requiring more money -- about $39-billion -- to stay afloat. "The markets continue to disbelieve our country," he said. "We have to plan our next steps for 2012 and 2013."
Debt restructuring -- something like what a distressed corporation does when it asks it creditors for an extension of loans in seek of starting up and staving off bankruptcy -- is in the making. What isn't clear, though, is the trade-off. By some accounts, Germany, Europe's paymaster, is insisting on a new package of austerity measures, even state assets and public property as Greek collateral.
Details of the plan are due to be hammered out ahead of an EU summit late June.
Until then, expect no glowing review from senior EU and IMF experts who arrive here this week to check up on Greek austerity reforms. Tax collection is ailing. Lofty plans to rake it $60-billion from an all-out sale of state companies and property have yet to kick off. And key labour reforms intended to bust monopolies and boost competition have been watered down significantly. Leaving Greece alone will be hard.