Greek rescue inches closer, still riddled with uncertainty

Luke Baker, Reuters, 07.02.2012

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For two years, European officials have wrestled with Greece to try to save the country from financial ruin. Yet the closer talks get to a definitive deal, the greater the risk seems to get that negotiations might collapse once and for all.

So many moving parts now need to come together at a single moment to clinch the deal that the danger of one piece being out of place and scuppering the whole enterprise has never been greater.

"They are dancing on a razor's edge," said Janis Emmanouilidis, a senior analyst at the European Policy Centre in Brussels who has written extensively on the debt crisis.

"Time is now really, really short. The further the crisis develops, the more intense these moments become. If something goes wrong, and that's becoming increasingly possible, at some point it could all not work out, with whatever consequences."

Emmanouilidis, a German-speaking Greek who in that respect straddles the poles of Europe's debt debacle, thinks it will work out in the near-term, with Greece's political leaders reaching a last-minute accord with the EU and IMF.

The lenders have demanded all parties sign up to the austerity measures demanded as part of the second bailout but with elections approaching in April, that could be akin to writing a political suicide note.

Even if they do sign up, there are several other elements that could go wrong in a multifaceted conundrum that has been likened to playing three-dimensional chess but which sometimes now borders on quantum physics for its complexity.

"The trend is that the situation is becoming more and more dangerous as the variables increase. The puzzle is becoming more complicated and the danger is bigger than ever before. But I still think things will fall into place," Emmanouilidis said. […]

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