The Horrible Truth: Saving Greece is The Easy Part, and Greece is a Lost Cause

Greece today announced that it will not meet budgets cuts it promised. Nobody is surprised. The FT has an editorial today with the total "Greece is a a Lost Cause". However, the most important opinion is that it mentions that all the measures taken so far have actually been counter productive.

"[...] asking it to slash and burn even further is counter-productive. Not only has the response worsened the country’s plight, it has raised doubts about the durability of the eurozone. These two issues must be separated. Allowing Greece to default within the eurozone – including as a prelude to its exit from the bloc – is the way to achieve that".

An orderly default is still possible, provided that the eurozone’s other exposed members are ringfenced against the worst effects of such a development. The most vulnerable is Portugal, whose plight is eerily similar to that of Greece (and which may ultimately need a Greek-style resolution)[...]".
"There is a horrible truth that eurozone policymakers have yet to grasp. It is that solving Greece is the easy bit. The euro’s structural flaws are a bigger threat to the survival of the eurozone than what happens in Athens. Greece has become a sideshow and a distraction. Eurozone policymakers need to accept that the stakes are much higher".