Greece Deal Only Prolonging the Situation

Despite the new rescue package, there’s still a strong risk that Greece will eventually have to drop the euro, influential economist Mohamed El-Erian said Thursday.  “The baseline scenario is still that Greece ultimately exits the euro zone,” he said.

But the short-term roadmap for the debt deal, which passed the Greek parliament early Thursday, should go relatively smoothly, the chief economic adviser at German financial giant Allianz said.

Case in point, the European Central Bank announced Thursday an increase in much-needed emergency lending to Greek banks, which have been closed for more than two weeks with capital controls on withdrawals.