GREECE (4)

Greece is between a rock and a hard place, as the Americans say. If its Government doesn't make even deeper cuts in public spending and commitments, then it won't get the second bail-out from the E.U. that is currently being discussed. If it does, then it is likely to become one of the most unpopular Governments anywhere, ever.

Last week the Prime Minister reshuffled his Cabinet, replacing his Finance Minister, and then got the new Government approved by the Greek Parliament. However, that was not enough for other E.U. leaders. At the recent summit, they made the next tranche of funds conditional on the next round of cuts' first being passed by Parliament. A vote on them is scheduled for next week, and it is by no means certain that they will be approved.

Outside experts seem to be agreed that Greece is bust, and that the only question is when everyone admits it. I am not so sure. Rescue packages buy time, which is a precious commodity in financial crises. However, in order to get this time, the Greek Parliament has to approve the new cuts. Will it?

Walter Blotscher