Greek Recovery Will Take Years

Lael Brainard, undersecretary for international affairs at the US Treasury Department, today told a congressional committee that Greece will need to continue reforming its economy “for many years” before a recovery is sustainable. She noted that the country faces a “challenging path” to reduce its debt, coupled with a “significant lack” of competitiveness to help it stay on that path.

Brainard’s statement is diplomatic-speak for the quandary that Greece faces: in order to get a second bailout package from the EU-IMF-ECB troika, the country must adopt strict austerity measures that make it impossible for Greece to grow its GDP. Without some chance to grow its economy — a chance that is all but derailed by the troika’s demands — there is little hope that Greece can avoid default eventually.