Greece's short-term debt is now the worst in the world as its 2-year government bond went to 13.55%. Greece surpassed the previous worst bond rate of Hugo Chavez's Venezuela. This comes in conjunction with an outbreak of "blue flu" (as its called in this country) among Greek air force pilots who called in by the hundreds today as too sick to fly, apparently in protest of pay cuts and new tax measures. (Note: Greece is a member of NATO.) In any other scenario this would be considered insurrection, suggesting either civil war or a coup is around the corner. Greece has been "promised" a bailout by the EU yet keeps getting mixed messages about what it needs to do to qualify for this aid. The economically healthiest EU member is Germany and it knows it will have to provide the the largest portion of any aid Greece receives. This notion has little popular support in Germany and local elections are coming up in a month. The other reality is that everyone knows Greece needs far more aid than the amounts that have been publicly discussed. Yet another reality is that after Greece, Portugal, Spain, Italy and possibly other EU countries will also be coming hat-in-hand for financial help.
The story is starting to get old, waiting for some conclusion. As time goes on, the last chapter is looking increasingly ugly.
Update: Yves Smith at Naked Capitalism has a good piece on the topic today titled "Greece: Dead Man Walking?" There is also a good discussion in the commentary that follows. Increasingly the comparison being used is that Greece could very well be the EU's Lehman Brothers.
Tues 04/27: Standard & Poors downgraded Greek national debt to junk status today. It also lowered its rating on Portugal's debt two notches.
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