Greece gets a breather

July 21, 2011 is now a historic date in a painful 20-month spell dotted with many other landmarks.

There is more to come.

The rather fuzzy text of the eurozone summit meeting on Thursday, with no technical details of how everything is going to be implemented, has provided a little bit of breathing space.

Europe is buying time. But is Greece buying time also? On the surface, it certainly looks like it.

The debt-ridden country got extended maturities for the new loans and a 10-year grace period, it secured liquidity for banks, a reduction in interest rates (but not a reduction in the total interest), and a bond buyback. It is a breather.

On the other hand, euro area leaders fell short of reaching a decision to issue Eurobonds and Greece?s much-debated return to the markets has been delayed further. The country, and its banks, will for a long time continue to depend on European funds and ?volunteering? bondholders.

Here?s a crucial macroscopic characteristic of the nascent condition: the potentially negative impact of Greece?s unavoidable financial dependence on the country?s political independence.

In light of economic developments, how much room for maneuver will Greece have in a number of unresolved geopolitically crucial issues? Consider the exploitation of energy sources in the Aegean Sea and the southeastern Mediterranean, Greek-Turkish relations, illegal immigration or the division of Cyprus, and you?ll realize that the answer to the above question is uncertain.

Also uncertain, for the time being, is the degree of involvement by our international creditors in Greece?s domestic affairs: fiscal policy, the maintainence of the necessary welfare system, the channeling of funds toward economic development, boosting domestic production, the creation of new jobs.

We should keep in mind that recession and unemployment are threatening an entire generation and accelerating demographic decline. As a result, after last week?s kiss of life — Greece is in urgent need of a reboot: a reboot of its political system, its production model and its values system.

The question however remains: Are there leaders out there capable of rebooting a semiconscious nation?

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