Eurozone Meltdown

For the longest time I wasn't sure if I felt offended or amused by this Greek restaurant's "Eurozone Meltdown Special" here in Manila. Tax-exempt but receiving my salary in Euro, I have two hearts beating in my chest when I follow the news about the "Euro Crisis".

Now the new $173 billion bail out package for Greece has been signed off on. This money will safe the country of the Gyro (which ironically sounds an awful lot like "Euro") to default next month. And then?

Greece is supposed to trim it's current debt of 160% to its gross domestic product (GDP) to 121% by 2020. 120% government debt is what "International Monetary Fund, the European Commission and the European Central Bank have deemed acceptable". Wow! Spending 120% more annually than you make is "acceptable" to be granted a huge bail out? My bank would throw me out the door laughing if my track record would spell: Currently, I spent 160% more money than I earn, I promise I'll only spend 120% more than I earn eight years from now, can I please get a loan? And, I don't really have a plan to a) curb my spending by 40% or b) how to get by trying to do so.

The monetary "stability" provided through this bailout is supposed to "give Greece space to improve its competitiveness" and "create growth for the Greek economy", according to Christine Lagarde, managing director of the International Monetary Fund.

I'm not an economist so please excuse my blunt observations on the subject matter. I'm just wondering how a bailout, which keeps Greek from defaulting next month, is supposed to stimulate economic growth in a country which is in a recession for the fifth consecutive year. Just wondering out loud...

One of the government's great plans to be more financially lean is to write down 100 billion Euro "worth of Greek government bonds and swap existing debt for securities with lower interest rates, a deal that would result in losses of 53.5% of nominal value for the private sector." What a great business model! Invest here and receive a 50% value loss instantly! I'm not so sure whether this will provide the right incentives to trigger the desperately needed economic growth.

I made up my mind about Stavro's Euro Meltdown Special. I love it! The restaurant is successfully competing with at least ten other food choices in a prime location, attracts customers with a witty promo, and stays in business. Maybe something the Greek government could learn from.