Greece's prime minister scored a difficult political victory on Tuesday - a victory that may prove to be completely meaningless. If George Papandreou had lost the no-confidence vote in parliament, it would have brought down his government and, more importantly, thrown Greece's struggling economic project further into chaos.
It only matters in the long term, though, if Greece and its creditors can find a way to resolve its debts and get its finances in order. The chances - without major debt restructuring - are slim to none. And that has the future of the euro zone, other ailing EU economies and even the global financial recovery all involved in the equation.
The first step would be for Greece to get its spending under control. Parliamentarians must now approve billions of euros in austerity cuts, tax hikes and reform measures. This could pave the way for a second bailout by EU members and the International Monetary Fund.
Greeks have good reason to be angry, although Mr Papandreou is weathering the invective that his predecessors deserve. Greece only qualified to join the euro zone in 2001 because its former government cooked the books, misreporting debt ratios and revenue streams. In the subsequent decade, easy credit and over-spending sunk the country into its current crisis.
Whether austerity measures are approved or not, Greeks will be spending less by necessity if not design. They are not, however, going to service about $500 billion (Dh1.8 trillion) in sovereign debt by tightening belts. At this point, the country is treading water by borrowing more at penurious rates - the yield on a two-year sovereign bond is 28 per cent. That is just adding to the burden.
Led by Germany and the IMF, another bailout plan will probably try and keep Greece afloat. There are good reasons for the effort, not least that defaults could spread to other ailing economies in Europe. Creditors across Europe and beyond also have an obvious incentive to see the debts repaid.
But whether one bailout, two bailouts or three, Greece (and quite probably some others) is not going to be able to pay unless its debt is restructured. Greeks will still face their austerity measures, and creditors will take a haircut, but better that than a lobotomy.
