Greece Waits For Bailout After Meeting EU Conditions

Greek politicians on Thursday agreed on massive cuts to bring their budgets in line with what the European Union has demanded. It's the latest act in a months-long drama to bring down the Greek debt load.

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Overall economic numbers for this year have been looking better, but almost every forecast for 2012 has included at least a mention that catastrophe could still come from Europe. The crisis over Greece's debt is not over, even after yesterday when lawmakers approved more budget cuts and economic reforms. Now Greek unions are protesting again.

Resolving this crisis has taken years, and there's a reason: a debt crisis has never really been solved this way before. Here's Zoe Chace of NPR's Planet Money team.

ZOE CHACE, BYLINE: Sure, countries have stiffed their creditors before. But actually, Greece hasn't yet. That's why this has been such an agonizing process.

HANS HUMES: The model usually is that you wait for a country to blow up and then you do the cleanup.

CHACE: This is Hans Humes, president of Greylock Capital, a hedge fund. He loaned Greece some money. And he's been negotiating with the Greeks for months on behalf of some of the people who lent Greece money.

HUMES: If you assembled everybody that Greece owes money to, you'd, kind of, have to get a really, really big hall.

CHACE: And because there's so many people, it's been a really complicated negotiation. But it's more than that.

HUMES: This could be a really good model of recognizing a situation for what it is, and heading it off before it becomes really catastrophic. But yeah, this is pretty uncharted territory.

CHACE: Usually, it's like this: the countries default on their loans - then we talk. But this is the European Union. Countries inside the EU are not supposed to go broke. Europe is supposed to take care of its own. If they let Greece go down - default on its loans, stiff its creditors - then other eurozone countries could get cut off from lending.

So European leaders have gotten people like Hans to agree to take some serious losses. In Greece it already feels catastrophic. I reached fund manager Timos Melissaris in Athens.

TIMOS MELISSARIS: Right now the economy is dead.

CHACE: What do you mean the economy is dead?

MELISSARIS: It's like what happened to the states during the thirties, even the supermarkets are down in sales - gasoline, everything.

CHACE: The Greek politicians came up with a budget they thought would please the European leaders, who have made a second round of loans conditional upon an extremely austere budget.

That austere budget won't help Greece grow its economy. And a little economic growth could go a long way towards helping Greece actually pay people back.

Zoe Chace, NPR News, New York.

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