Buying a plane ticket to Greece? Not quite yet.

Reuters posted an article tonight that reports that Greece has finally reached an agreement with the IMF in order to relieve some of its debt and hopefully spur its economy back into fruition. The article reminds me of a couple issues that we have discussed recently in class, not necessarily specific to Greece but relevant in light of their recent struggles.

The first of these is that we have talked in class about how the IMF is often painted as the ‘bad guy’ even after bailing out countries because of the austerity measures they force upon any country needing their assistance. And yet, the article seemed supportive of the organization, lauding their ability to effectively negotiate a deal with Greece that would both spark its economy and also keep other countries in the EU from facing financial difficulty after funding the efforts in Greece. Germany, for obvious reasons, receives special attention and goes so far as to suggest that “a debt cut was legally impossible, not just for Germany but for other euro zone countries, if it was linked to a new guarantee of loans.” Important to note is that news of the specifics of the debt relief wasn’t available, and so German resistance is to one option among a multiple of potentially viable debt relief.

Another element of the debt relief related to the portrayal of the IMF was the implicit debate over whether Greece has the necessary institutions in place in order to effectively use their debt relief in order to help their economy function. Just as with developing countries, foreign aid cannot be helpful without programs established within the country that spread money throughout the nation.

And given this insecurity, will foreign investors want to place their money in a country so dysfunctional even forced IMF sanctions may not be enough? Especially considering much of Greece’s economy is built upon tourism, its financial solvency depends on a positive impression of the country by foreigners around the globe.

These questions are not to discredit Greece or the IMF, but rather to suggest that the article’s celebration of new European success (the article mentions that “the euro strengthened against the dollar after news of a deal was reported by Reuters) should be taken with a grain of salt. Financial solvency for Greece and the EU might be on the way, but it’s not there quite yet.