After an all-night round of talks among Eurozone finance ministers, Greece was granted its second bailout, this one for €130 billion, in a package that includes recently passed austerity measures and a debt restructuring. But confidential reports distributed to the finance ministers indicate that the deal will not work and may even be counter-productive.

This a.m. Atrios highlights an op ed at the Financial Times by Wolfgang Münchau pointing out that Greece now faces the bitter choice of defaulting if it wants to preserve any pretense of democracy and national sovereignty. That follows a week or more of intimidating and insulting comments by German financial minister Wolfgang Schäuble and others

I don’t know how many Eurozone finance meetings have been seen as consequential, but we’ve got another one today, with the Greek bailout as the main topic. Greek leaders hope that the finance ministers will approve the bailout, after they gave final assent to austerity measures. CNBC quotes officials saying the chances are “little higher than 50-50.” What we learned going into the meeting is more evidence that the ordered cure for Greece’s ills, austerity, is causing the disease:

New statistics out of Greece show that austerity shrunk the economy more than expected last year. GDP in Greece fell 6.8% in 2011, and a slightly faster 7% in the fourth quarter. The country is in a fifth straight year of recession, approaching a full-on depression.
European leaders are still trying to impose more austerity, but some Eurozone finance ministers may be trying to force a default and exit from the euro.

Greek lawmakers held up their end of the bargain by agreeing, despite mass riots in Athens, to crushing austerity measures required by the “troika” (the European Union, the IMF and the European Central Bank) in order to receive a new bailout. But the European finance ministers remain hesitant to deliver the bailout funds, claiming to be wary of what they consider past broken promises by Greece.

As I mentioned on Sunday, the Greek Parliament agreed to a bailout deal that exchanges funds from Europe for new austerity measures that will sink the economy even further. The measures effectively destroy labor law and decimate wages.

The FY 2013 budget that the Administration will release today is, in the long run, a meaningless document in substantive terms, so I don’t want to spend that much time on it. But I was a little surprised with the pushback I received about my assessment that it reflects a shift in tone rather than policy. It’s a simple fact that the Administration has wanted a deficit deal for some time, and that this budget will build in a deficit deal. They’re going about it in a smarter way with a higher bid in the negotiations.

Amid general strikes and riots in Athens, the Greek Parliament passes a late-night vote on new austerity measures that are seen in European capitals as a prerequisite to the release of bailout funds for Greece.

Greece has agreed to new bailout terms, with brutal austerity measures attached, but Eurozone finance ministers don’t believe the Greeks will follow through, so they’ve held up the provision of the funding.

This must be the day when everything gets sewn up into neat little packages. The Greek government has announced a deal has been reached to secure their second bailout, though one junior partner has not confirmed agreement. The head of the European Central Bank is saying a deal has been done as well.