Greek bailout stirs doubt

Finance ministers from the 17 eurozone nations agreed Tuesday to their second large bailout of Greece in less than two years. But that didn't keep Fitch, a global credit rating service, from further downgrading that debt-ridden nation's previously abysmal "C" to "CCC" after reviewing the accord. Fitch also warned that a default of the Greek government was "highly likely in the near term."

The rest of the international financial realm also seemed unimpressed by the debt deal, despite the acceptance by Greek officials of severe austerity measures as a requirement of receiving the relief package.

As The Wall Street Journal's Stephen Fidler wrote in an analysis published Wednesday, "the eurozone's two-year debt crisis has seen too many false dawns."

While it wasn't easy getting Greece to sign on to the plan that will steeply reduce unsustainable government benefits to workers (and non-workers), it will be far more difficult to persuade its leaders -- and its people -- to follow through on such long-term belt-tightening.

That political reality remained clear Wednesday as protesters again rallied against the accord outside Greece's parliament in Athens.

The agreement will provide a $172 billion bailout and a $141 billion debt write-down by banks and others who hold Greek bonds. But as The Associated Press reported Wednesday, the write-down will "at best" lower Greece's public debt from 170 percent to 120 percent of its gross domestic product.

Sony Kapoor, managing director of the international financial think tank Re-Define, dismissed even that number as an overly optimistic projection based on "arithmetical gymnastics."

That hits too close to home: U.S. public debt as a percentage of GDP eclipsed 100 percent last summer for the first time since 1947.

And while Greece's fiscal woes have taken center stage in Europe's fiscal crisis, some larger nations there, including Spain, Italy, Portugal, Britain and France, are suffering major debt problems of their own.

As Journal analyst Fidler ominously wrote of the experts' response to the new bailout for Greece: "The overriding reaction was of unease that this tough deal, which has already generated huge opposition among Greeks, is bound to fail. Many observers ask not if the program will fall apart, but when."

Meanwhile, Americans should ask when our elected officials will deal with our own red-ink flood, which as of Wednesday had lifted our record -- and climbing -- national debt to $15.43 trillion.