While concerns about Greece are not going away, the worst case scenario has been averted. Greece has succeeded in pushing through a debt haircut needed to obtain a second bailout package from the European Union and the International Monetary Fund. A large majority of the country’s private-sector creditors have agreed to the historic debt restructuring, thus paving the way for the second aid package. The government in Athens announced on Friday morning that 85.8% of private creditors had agreed to the debt swap. The International Monetary Fund intends to contribute 18 billion euros ($23.6 billion) in fresh funds to the second aid package for Greece, scaling back IMF help for the nation that triggered Europe’s debt crisis.

Two years ago former Greek Finance Minister George Papaconstantinou was saying “Restructuring is not going to happen. People fail to see the costs to both Greece and the eurozone of a restructuring: the cost to its citizens, the cost to its access to markets. If Greece restructures, why on earth would people invest in other peripheral economies? It would be a fundamental break to the unity of the eurozone”. Yesterday, the International Swaps and Derivatives Association declared that Greece is in official default.

Some analysts are very optimistic because Greece got its debt restructuring and bailout funds are coming; banks across the continent have gorged on cheap cash, in some cases enough to cover their financing needs for years; yields have dropped across the eurozone periphery. They think that Europe has a plan to solve both problems; austerity and growth. But since these are mutually incompatible, Europe, in fact, has no solution for Greece. With unemployment climbing, production and consumption tanking, businesses shutting down, and tourism nose-diving, there is only one way for tax revenues: down. Budget deficits will be worse than promised. Greece’s debt will continue to balloon. The standard of living of the vast majority of Greeks will get slammed, though the elite that are negotiating these deals will do just fine.

Now the investors are focused on what the Fed is going to do. Speculation that the Federal Reserve may announce more quantitative easing has kept some investors upbeat, but there has been nothing to suggest that the Fed will change its policy. The Federal Open Market Committee, the Fed’s policymaking panel, is scheduled to meet on Tuesday. The Bank of Japan is also meeting on Tuesday for the first time since it surprised market with a policy easing in mid-February which has sent the yen down around 5% against the greenback.