The wise heads of the European financial crisis have saved the day.  What a relief.  They cobbled together a plan this week that will provide support for Greece whose debt is 1.6 times greater than its gross domestic product.

In order to achieve this miracle they had to offer some “credit enhancements” as they call them to private bond investors.  Don’t you love the semantics?

The question in my mind is two-fold.  Would your local bank offer you a loan deal like this to invest in a business whose debt was 1.6 times its annual revenue?  And if it did would you do it?

In short, it is another attempt to do the impossible and the details are yet to be announced.  Don’t expect much to change.  Until the fundamentals of economics (what comes out must be more than what goes in) are addressed there will be no real relief.  Until then, keep working on making your company a viable economic enterprise.

Jac

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