The Guardian view on the new Greek bailout: more extend, but – please – no more pretend | Editorial

Even Athens' creditors are now divided on whether it is worth carrying on with the farcical pretence that a bankrupt country is ever going to repay in full

An agreement this week to release a10.3bn of bailout money to Greece was, in comparison with past negotiations, straightforward. That does not reflect well on the European officials and international creditors involved. It is a measure of how long the crisis has gone on and how low expectations have fallen.

The achievement is in postponing a dispute between eurozone disciplinarians and pragmatists at the International Monetary Fund. Hawkish Europeans, chiefly Germany, take the view that softening conditions imposed on Athens undermines the financial credibility of the currency union. The IMF calculates that Greece cannot service its debts on the current trajectory; that even heroic efforts of fiscal tightening would not yield sufficient revenue and might suffocate the economy instead. The current bailout terms envisage Greece reaching a budget surplus of 3.5% of GDP. The IMF thinks 1.5% is a more plausible figure and wants "reprofiling" of Greek debts - easing the overall burden and softening the interest rate.

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