Since May commentators have been seriously concerned about the solvency of Greece in 2013/14 once the Euro-zone loan runs out.
This led to the inevitable question as to what the use of that facility is, if all it does is to post-pone a problem, rather than solve it. As Nouriel Roubini put it “Greece, more likely than not ,isn’t just illiquid, but insolvent. And providing an insolvent country with money and forcing it to make painful cuts isn’t going to do it.”
This seems to have been addressed yesterday when the Euro-zone countries agreed to extended the maturity of Greek debt by another 4 and 1/2 years, to 7 years. So this is a good development.