Is Greece going to set off the long feared next wave of the Great Recession?

It was given impetus when Paul Krugman, the Nobel laureate economist, praised it on his New York Times blog: “The trending hashtag ThisIsACoup is exactly right,” he wrote. “This goes beyond harsh into pure vindictiveness, complete destruction of national sovereignty, and no hope of relief.

Word is that a deal has been reached about 10 minutes ago.

Third bailout, apparently.

The third and most troubling kind of damage that has been done to European integration is the deterioration of trust between the EU member states. References to trust were heard most loudly this weekend from the hawks among the euro zone creditor states – Germany, Finland, Slovakia and others – who justified their call for unprecedented limitations on Greek sovereignty with reference to Mr. Tsipras’s unreliability, and the danger of him reneging on an eventual agreement. But by disregarding the referendum result, insisting on reform measures that were widely seen as humiliating, categorically ruling out a reduction to Greece’s debt and openly flirting with the country’s expulsion from the euro zone, Germany and its allies did at least as much damage to mutual trust – and to the idea of European solidarity – as Mr. Tsipras with his ill-advised referendum. Even if a bailout deal is eventually implemented, this does not bode well for the future of the EU, whose complicated decision making system depends entirely on the member-states’ mutual goodwill and co-operation.

The idea of a unified democratic Europe is still a powerful one, as the crowds waving EU flags in the streets of Kiev last year attested. But it’s going to be hard going forward for Brussels to demand its member governments respect the will of their voters when it’s extremely reluctant to apply those standards to itself.

Why on earth did he initiate a referendum when he later on accepts more
austerity measures? Just to save face? Tsipras is a young and inexperienced politician who will bring his country to its breaking point.

Greece should have had a plan to present to the EU and another plan in how to proceed in a Grexit situation.

I have a feeling that there will be new elections soon in Greece as Tsipras won't get this new austerity program through parliament

Hanging the critical issue of bank recapitalization on a highly uncertain program of asset disposals has left some observers skeptical of the plan.
“If it doesn’t happen, so how would the funding happen for the bank recapitalization, for the debt reduction?” Moritz Kraemer, a managing director for sovereign ratings at Standard & Poor’s, asked in a Bloomberg Television Interview. “What are the actual assets? For me it just sounds like a rabbit out of a hat.”

Like the previous bailout programs, the aim is to put Greece’s debt on a downward trajectory as a proportion of its GDP. But the math looks strained: Greek debt avoids skyrocketing only because lenders say Greece will raise €50 billion from privatizing public assets, the proceeds of which would mostly go toward paying down debt.

Previous bailout plans also assumed large privatization revenues. Only a fraction have materialized. The problem was and remains that Greece doesn’t have assets that it can sell for such high prices in the foreseeable future, economists say.

In that case, tensions between the IMF and Germany over writing off Europe’s loans to Greece are likely to erupt again

But if what happened over the weekend doesn’t quite amount to a coup, it has nevertheless been a ruthless display of power politics on Germany’s part and a chilling reminder of the remorseless logic of a monetary union dominated by creditors and pre-Keynesian economics. In the words of Paul De Grauwe, a well-known Belgian economist who teaches at London School of Economics, a “template of future governance” of the eurozone was written over the weekend: “Submit to German rule or leave.” In the years and decades ahead, Germany may discover that many Europeans would prefer the second option.

"The German government destroyed seven decades of post-war diplomacy on a single weekend," news website Spiegel Online said.

"There is a fine line between saving and punishing Greece. This night the line has disappeared," tweeted Mathias Mueller von Blumencron of the conservative standard-bearer Frankfurter Allgemeine Zeitung as the details of the German-brokered austerity-for-aid deal emerged.

"Merkel managed to revive the image of the ugly, hard-hearted and stingy German that had just begun to fade," the centre-left daily Sueddeutsche Zeitung wrote.

"Every cent of aid to Greece that the Germans tried to save will have to
be spent two and three times over in the coming years to polish that image again."

Why on earth should Greek MPs vote for a painful economic reform package which the IMF - the supposed global arbiter of these things - does not believe will put the country back on the path to prosperity?
The eurozone creditors, and Germany in particular, forced Alexis Tsipras - against his strong preference - to accept IMF participation in the next formal bailout package to be negotiated if Greek MPs pass the initial reform measures tonight.
They told him, in effect, he would be turfed out of the eurozone and into national ruin unless he took more of the IMF's money and fiscal bossiness.
Which also look tragically comic tonight - with the IMF saying that if it's all the same to Mrs Merkel, it would rather not touch Greece with a barge pole.
Or to be tediously literal, the IMF has made it clear that it does not wish to participate in any further Greek bailout, unless Germany and the rest drop their vehement opposition to big write-offs of Greek debt.