Greece Deal Will Likely Pass Parliament, but Won't Solve Debt Crisis

Greece’s debt deal won’t put its economic crisis to rest for good, one economist said. ‘If this deal is accepted, we will be back here in a year or two,’ said Bloomberg Intelligence’s chief economist Jamie Murray, who covers Europe, the Middle East & Africa. Greece agreed to spending cuts in exchange for some $96 billion in rescue aid from its European creditors. The debt-stricken country defaulted on its $1.7 billion payment to the International Monetary Fund on June 30 and faces a payment due to the European Central Bank on July 20. ‘Greece’s debts are unsustainable, they are too large relative to its gross domestic product and it’s not going to pay them back,’ Murray added. ‘We are going to be revisiting this issue for some time to come.’ These austerity measures, which are subject to approval by Greece’s parliament, are deeper than the ones previously rejected by Greek voters in a historic referendum just one week ago. ‘It’s not so much that the cuts aren’t big enough, it’s that the debt is too large,’ Murray added. ‘It would make more sense to write down some of the debt, lift some of the burden of that debt and promote growth.’ TheStreet's Scott Gamm reports from New York.