Courtesy of Mish.
Alexis Tsipras, head of the Greek radical-left party Syriza, currently in the lead in national elections, wants a new bailout deal for Greece, including huge debt writeoffs.
Socialist policies aside, on that score Tsipras is correct. Greece cannot possibly pay back the €245 billion it owes creditors.
Contagion Catch 22
Germany fears contagion in the form of demands by other countries that will also want bailout deals or rule changes if Greece gets one.
Yet, yet a much more destructive contagion via a cascade of defaults is all but assured if Greece is forced into default.
New Hurdle in Finland
Making matters worse, Finland has joined the no bailout parade. Even if Germany was willing to Greece some concessions, Finland does not want to go along.
This poses an additional problem for the eurozone block that must agree unanimously to all such deals.
With that backdrop, please consider Finland Emerges as Major Hurdle to Greek Bailout Deal.
Finland has emerged as the biggest stumbling block to negotiating a new bailout deal with an incoming Greek government, telling its eurozone partners that it will not support debt forgiveness and is reluctant to back another extension of the €172bn rescue.
In an interview, Finland’s prime minister [Alex Stubb] said he would give a “resounding no” to any move to forgive Greece’s debts and warned that a new government in Athens would have to stick to the terms of the existing bailout.
“We will remain tough. It is clear that we would say a resounding no to forgiving the loans,” Mr Stubb said….
