Update: A Greek Tragedy

In an interim measure to stem its debt crisis, Greece sold $2 billion of 3-month treasury bills at 3.65%.  In an era of low interest rates, the yield is considerable. Greece is expected to cover its April obligations but little else beyond. The good news for Europe in all this is Germany's surprising strength in the last quarter. Exports have risen and household debt remains under control.  However, I reiterate that until clear and bold steps are taken to reduce public sector spending, short term bond sales to cover upcoming obligations merely shift the problem to future generations.  The hope that a stronger Euro/Greek economy will reduce current obligations in the future is the type of financial roulette that Greek and European taxpayers should not have to endure.  The lesson: governments around the word need to take affirmative steps to encourage private capital accumulation and production.