Almost everyone thinks that a comparison between good old Greece and Old Dinosaur Netanyahu is odd. But one can easily compare them in terms of their limited viable options. Each has a set of bad options that include two bad elements. Netanyahu’s two options are: resign his job as prime minster or make war with neighbors and Iran. The Old Dinosaur is now isolated within his country and abroad. The Labor party is threatening to leave the government if Netanyahu fails to negotiate with the Palestinians. The Kadima party is shunning him. His unbalanced foreign minister is warning him about making concessions. Abroad, he is also isolated. The Palestinians find Old Dinosaur out of touch and useless to negotiate with. President Obama cannot see eye to eye with him. The Europeans find him a predicament to peace.
Netanyahu’s second bad option is to make war against Hizb Allah, Syria and/or Iran. But Netanyahu is a coward and he is not capable of making such a war. At the same time, he is not crazy as the Obama administration is trying to portray him to the Chinese to get them to cooperate on the Iran sanctions. He is the calculating type. He understands that the local, regional and international geopolitics are not in his country’s favor now. The prowess of Hizb Allah and Syria can hurt his country badly and at the end he will be forced to resign in disgrace.
Netanyahu is now between a rock and hard place, both of his own making. Therefore, his one viable option is to resign.
And what are Greece’s options? As mentioned above, it has two options: a bailout from the European Union and the IMF or restructuring its debt. The bailout should cost more than $65 billion annually over more than five years, or the equivalent of more $325 billion over five years. This amount is almost equivalent to Greece’s GDP, implying that the southern European country’s public debt burden will be about 150 percent of its GDP in 2015. According to the WSJ, such a debt burden will increase Greece’s 10-year bond rate to 10%, making the spread between its and Germany’s rates to be close to 7 percent! To service the debt, Greece has to pay about $50 billion dollars each year on its debt. Given the country’s low growth prospects, especially in the light of future fiscal restructuring, Greece cannot service its debt and the debt burden would put it in a debt circle that should perpetuate the burden
Greece’s other option is to restructure its debt. As a sovereign state, it has the choice between extending the maturity of its debt, taking a haircut on its bond or both. This is the option that Greece will likely find itself in. It is probably the only viable option for Greece now. But it should also keep the possibility of moving out of the European Union open, although this venue will be costly and require a lot of adjustments. Greece is really in big trouble.
Netanyahu will be out of the office soon and a more balanced and serious approach to peace in the Middle East should follow. Abbas should refrain from dealing with the Dinosaur to hasten his extinction. For Greece, the debt woes will linger on for many years to come, long after the old dinosaur became extinct.
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