After weeks of protracted debate, the Eurozone countries and the International Monetary Fund came to a €110 billion ($147 billion) deal over the weekend to save Greece from bankruptcy. In return, the Mediterranean country agreed to cut government spending and hike taxes, trimming €30 billion from its deficit by 2013. But critics are arguing the deal sets a dangerous precedent in the unstable Eurozone. Should Greece have been bailed out? (Watch a Russia Today report about Greece's bailout)
There's no guarantee it will even work: Europe may live to regret this bailout, says The Economist. The "austerity plan" that Greece will impose on its citizens may not even work. With a "nasty recession looming" in the country, bankruptcy still looks "horribly likely." Unfortunately, the "terrifying task" of "keeping the euro on the rails" has just begun.
"Europe agrees a "shock and awe" bail-out for Greece"
But there was little else Europe could do: Europe had no choice, says Paul Krugman in The New York Times. The Greek "fiscal problem" was beginning to turn into a "death spiral," into which countries like Portugal, and even the Euro itself was at risk of being sucked. This deal is an attempt to "break the death spiral by main force," giving Greece all the money it needs and at a reasonable cost. It was the only option they had, and it might just work.
Actually, they could have let Greece go bankrupt: Letting Greece default might have been the better option, says George Irvin in The Guardian. Yes, it would mean "abandoning the euro, introducing a 'new drachma,' and probably devaluing by 50 percent or more." But Argentina survived its bankruptcy, and even paid back its (much smaller) loan in full a handful of years later.
"Greece still has a choice"