Is the Greek bail-out starting to crumble?

Successful bond auctions by the Spanish and Portuguese Governments last week, coupled with signs that other markets may also be starting to function more normally, provided further glimmers of hope that the ECB’s bond purchase programme is having a lasting effect on markets. But even if this does mark a turning point in the crisis, Greece’s future in the euro remains in doubt. The acknowledgement that the Greek recession will be much longer and deeper than was previously assumed by the Troika means that a further debt restructuring will be needed to return public debt to a sustainable level. Given core economies’ reluctance to offer Greece more favourable terms, the bail-out could soon crumble, prompting a Greek exit from the euro-zone.