It is hard to overemphasize how important Greece and Europe are to our eventual economic recovery. Whether we like it or not our fortunes are tied to Europe. We do a ton of trade with Europe. If they fall in the tank, they’re not going to buy US exports and that will cause a significant slowing of our economy. No matter how much we’d like to think that we are strong and independent, we are tied to the world economy, especially to Europe.
From WSJ (may need a subscription):
Greece and its private sector creditors said Saturday they were on the verge of a deal to write off €100 billion ($132 billion) worth of the country’s debt, pending the outcome of separate talks on a new, multi-billion euro bailout for Athens.
In separate statements, Greece and the creditors both noted significant progress in the talks and said a final deal would be announced next week in tandem with the new loan program.
Effectively, the focus now shifts to a European summit in Brussels Monday where the continent’s leaders will sanctify — or not — the terms of the debt restructuring and the new loan. But complicating those discussions are concerns that Greece’s funding needs might be bigger than originally thought, while Europe appears divided over how to cover the gap.