As expected, the European Union and International Monetary Fund have chosen to subsidize the profligacy of Greek politicians. A deal has just been announced. As the Washington Post reports:
Greece on Sunday announced a long-awaited deal with the European Union and International Monetary Fund for a $145 billion financial rescue, an unprecedented package… The three-year package is also the largest international rescue to be backed by the IMF. …The proposed cuts in Greece include a new round of reductions in salaries for state workers, more flexibility to fire them, an increase in the value-added tax from 21 percent to 23 percent, and higher taxes on fuel, tobacco and alcohol. More state-run industries are expected to be privatized, and military spending will be slashed.
I’m not terribly optimistic about the long-run consequences. I also can’t resist pointing out that the VAT has jumped from 19 percent to 21 percent to…
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Utopia, you are standing in it! 
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