Facing vicious debt cycle, Greece sprints to apply fixes

“There’s this erroneous assumption that the standoff between Greece and the eurozone is the only thing holding back a robust recovery,” said Simon Tilford, deputy director of the Centre for European Reform. “Greece’s problems are more deep-seated than that.”

By the end of summer, Greece will probably need yet another international financial assistance package of €30 billion to €50 billion to get it through the next year and a half, economists said.

“They need a third bailout, because the economy won’t grow quickly enough and generate the needed tax revenue to keep the country afloat,” Mr. Tilford said.

“The problem is that we’ve been down this road before,” he added. “With each bailout, the obstacles to a recovery increase, because a bailout piles more debt on top of Greece’s already unsustainable debt, and won’t solve the underlying problems.”