Greece may get a bailout, but its economic woes will eventually lead to default on its government debt, says Paul Donovan, deputy head of global economics for UBS.
For now, both the International Monetary Fund and euro zone nations will provide support for the beleaguered nation.
A bailout plan, hammered out late Thursday by euro zone nations, sets out a system to rescue Greece if it finds itself unable to borrow. It would provide individual loans from other euro zone countries and funding from the International Monetary Fund, the Associated Press reported. But it sets out strict conditions for activating the mechanism, saying it could only be used as a last resort, and requires unanimous agreement of all 16 countries that use the euro.
“The Germans are going to have stop whining and start signing checks sometime soon. The French will have to pay up as well,” Donovan told Bloomberg.
Read More: – By Dan Weil, Moneynews