Euro Crisis Moves to France

04/02/2014 4:30 pm EST

Focus: GLOBAL

Jim Jubak

Founder and Editor, JubakPicks.com

For MoneyShow's Jim Jubak, there seems to be no end to the excitement of the EuroZone crisis, as it appears that the turmoil is, practically, hopping from one European nation to another these days, as can be deduced, given the recent EuroZone finance ministers' meetings.

I want to know who scripts the meetings of EuroZone finance ministers?

Whoever it is gets maximum drama out of a deadly dull event.

So, here we have the ministers meeting yesterday in Athens—the scene of the almost meltdown in the euro.

The lead item from the meeting is that the finance ministers have ended a six-month bailout standoff and approved an 8.3 billion euro ($11.4 billion) bailout package for Greece, with the first 6.3 billion scheduled for payout by the end of April. The deal comes just in time to pay a 9.3 billion bond due in May. (Most of that, by the way, is due to the European Central Bank.)

The deal became possible when the Greek parliament passed, on Sunday night—by one vote—a set of reforms demanded by the country’s international creditors at the European Central Bank, the European Commission, and the International Monetary Fund.

“The conclusion of this review is a relief,” said Yannis Stournaras, the Greek finance minister, and the current front-runner in the contest for biggest understatement by a EuroZone finance minister in 2014.

This package, of course, doesn’t really end the Greek debt crisis. After this payout, the European Union’s second bailout package of 172 billion euros will have only 1.8 billion euros left available for future payouts. The Greek government will attempt to sell debt in the public markets this year—for the first time since the beginning of the euro debt crisis—so it won’t need to go back to the, effectively, empty well. If that effort should stall (which depends more on the whether the Fed’s move to taper off its bond purchases throws global financial markets back into near panic than on anything else), expect the Greek debt crisis to come roaring back.

But don’t worry. You don’t have to wait for the results of the Greek government’s bond sales for your next dose of EuroZone excitement.

At the same time as the finance ministers were announcing an “end” to the Greek debt crisis, the French government threw the Athens meeting into turmoil. The embattled government of President Francois Hollande, fresh off getting trounced in local elections in France and looking to throw money (it doesn’t have) at a struggling economy—and poll numbers so low that the government has to look up to find “sagging,”—demanded more time to bring its budget deficit in line with the 3% limit set by EuroZone treaty.

The response from EuroZone finance ministers was less than favorable, since France has already received a two-year extension of the 3% target, and since the most recent numbers from Paris project that the budget deficit in 2014 will hit 4.3%—and not the 4.2% projected earlier by the European Union. Way back in February, the German and Finnish governments came down in strong opposition to giving the French two more years—so you can imagine the joy in Berlin and Helsinki at the latest French demand.

Especially since Italy, under new Prime Minister Matteo Renzi, has proposed a new budget that stands no chance—honest economic analysis calculates—of meeting its own 3% deficit target.

It looks like the Greek crisis is about to be replaced by the French crisis, with an Italian crisis just offstage—and a renewal of the Greek crisis quite possible this summer.

Now that’s entertainment.

Related Articles on GLOBAL