Greece Taps Loan Package

The package was supposed to be a in the wings as Greece got its fiscal house in order, apparently that didn't work out to well as the cliff approached:

The Greek government formally requested an international funding package Friday aimed at pulling the euro-zone member out of a debt crisis.

Prime Minister George Papandreou announced on Greek television the activation of up to €45 billion, or $60 billion, in loans expected from the European Union and International Monetary Fund, Reuters reported.

(previous post, but quite relevant to this development)In a nutshell the plan is for the Left leaning Greek government to push an austerity package to keep their house in order, all the while other European nations provide financing to keep the country afloat. The problem comes from both ends, Europeans (Read Germans) don't feel like paying for the Greeks and their entitlement ethic, whereas the Greeks (Read Unions and Leftists) refuse to give up their benefits over what they consider the mistakes of previous governments. An additional wrinkle is that previous Greek governments became entangled in many of the complicated derivative swaps that have plagued numerous American municipalities from Jefferson County to Philadelphia. For the record, whenever Greece and its collapse comes up their is an amazing ability of those from the left to focus on the "Banksters" and ignore the disastrous economic policies of the state. I do not discount the impact of these bad deals, but they make a bad situation worse, they alone are not driving the collapse. How bad can it get? Well, lost among the headlines is the very real chance that Iceland will default on its debts, money owed to English financial houses. Spain, Italy, and Portugal are holding on but approaching the cliff, and finally Euro-zone economic growth is literally nil or in some case contracting. Their is simply too much debt. Of course let he who is without sin cast the first stone. Don't worry though, Krugman says its all good here and we need more spending!