The looming deadline is May 19, when bondholders are owed approximately $10 billion. As of today, the Greek government still might not be able to pay.
So Chancellor Merkel (more on her here), President Sarkozy, and the rest of the European gang have been trying to work out the details of a bailout. Problem is, the Germans cannot decide if they really want to get in the business of bailing out southern Europeans and their profligate vacationing. On Diane Rehm's Friday News Roundup last week, the debate revolved around whether or not the Germans would be willing to risk the collapse of the European Union concept for the sake of standing strong on not bailing out the bad behavior by Greece.
As with the US investment banks, it appears that the larger entity (US government then = Germany now) does not want to face what could happen if it doesn't pony-up, so the bailout is in the works.
Dominique Strauss-Kahn at the IMF is playing a leading role -- could he be an early contender for 2010's Man of the Year, as he steps into the Ben Bernanke role?
Here's an excerpt from today's Times article, by Nicholas Kulish (here):
My last post about Greece was on February 22, here.
European leaders tried to claim the initiative and show that they were working to calm market fears over Greece’s tide of debt and the long-term viability of the euro currency. Traveling in Beijing on Thursday, President Nicolas Sarkozy of France told reporters that he was in constant contact with Mrs. Merkel and that Germany and France were “in perfect agreement” over how to deal with the Greek debt crisis, a spokesman for the president in Paris confirmed. Negotiators in Athens pushed to wrap up an agreement for significant cuts in Greek public spending to clear the way for the government to get financing and reassure investors worldwide that European debt was safe.