In a sequel to my last Crisis & Bailout post, Charles Wyplosz is taking another stab at the looking glass. 

The Guardian has a good timeline of Greek Events, starting with the infamous our goverment budget is a "black hole news conference" and chronicling the $240 billion already spent by the "Troika" (EU, ECB, IMF).

While the Greek Prime Minister is "confident" that Greece will return to positive growth in just a couple of months, Wyplosz is not so optimistic: "The situation in Greece is so disastrous that some form of debt relief is likely." Whether to believe the politician or the economist is always an issue, but the data always tells the smoking gun: The Greek programmes haven’t worked

• GDP has plummeted, and continues to contract to a total of 30% over the last six years of deepening depression (see the figure below).

• The European Commission forecasted Greek growth of -4.1% for 2013, but it has been -5.5% so far this year according to the IMF.
• The unemployment rate stands at 27%; youth unemployment is 57% (yes, that’s fifty-seven, not 5.7).

The financial situation is almost as bad:

• At the end of 2009, on the eve on the crisis, Greek gross public debt stood at 130% of GDP, now it is 175%.
• Bank deposits have fallen by 30%, partly fleeing abroad, partly the result of strong dissaving by the population.
• Nonperforming loans to households and corporations have reached the amazing levels of 25% and 31%, respectively.

My personal favorite is the Troika's Debt Restructuring program: Greece could no longer pay the interest on its bonds, so lenders had to accept a "haircut" – which is a reduction in the value of the debt. So if you held a $100 goverment bond, over night your bond was declared to be worth only $47. The haircut lowered the debt-to-GDP ratio by 55 percentage points, but since Greek banks held almost 1/3 of the debt, the banks' capital was wiped out and the Troika need to pay for a bank recapitalisation – added back an additional 25 percentage points to the debt-to-GDP ratio. Lots of smoke screens here. 

With the Greek crisis eventually came contageon, leading to sovereign debt crisie, banking crises and growth/competitiveness crises in several countries all reflected wonderfully in the interest- risk differentials