Greece continues to be a sore spot for the global economy as the newly-elected government has made clear that it doesn’t plan to honor past agreements made with the European Union.
Greece, France, the rest of the European Union, and a host of international banks have already agreed to write off a significant percentage of Greece’s debt as a way to stabilize the economy and keep Greece in the euro trade group. But now Greece says they want a different deal. This is obviously not a positive for Europe and does have the potential to destabilize global economics if Greece simply declines to pay their bills.
Creditors will likely have to craft a revised repayment schedule tied not just to austerity, but also to growth. Look for a new round of concessions; Greece recognizes that the appetite for more drama is very low among other member countries. Renegotiation might not be the preferred solution, but “too big to fail” lives. The politicians in Greece know that and despite the posturing by creditors, they know it as well.