Not likely…

The real issue for the finance ministers is to try to fit the ever-deteriorating Greek numbers within two self-imposed conditions. One is that the restructuring of Greece’s debt should reduce its burden down to “about 120% of GDP” by 2020. The other is that that the contribution of governments to the second package should be €130 billion (including some funds left over from the first €110 billion bail-out) after the “voluntary” losses being negotiated with Greece’s private creditors*. Both are somewhat artificial figures. The debt ratio of 120% was chosen because it is the level of Italy’s debt; the contribution of €130 billion was decided in October, so cannot be changed for fear of giving the impression that Greece is a “bottomless pit”.

But as matters stand at the start of the meeting, the package would leave Greece with a debt burden of 129% of GDP – too high for many of the creditors. Tonight’s homework for the ministers will be to fill the remaining fiscal hole: by convincing the ECB to forego profits on the bonds it bought at a discount (it has more or less agreed to do so) and perhaps by reducing the interest rate that Greece is charged by its creditors…

But even if a deal is agreed tonight, big questions remain. How long will it be before Greece must come back for still more money? And if it must be kept permanently under threat of default, what is the chance of restoring the confidence needed to help Greece recover? For now, the ministers seem ready to play for time, in the hope that Italy and Spain can be stabilised. They will no doubt express confidence that the Greek problem has been settled once and for all. But sooner or later, they will be back for more crisis talks.