Greece: Er, do you think we could get an extension on those austerity benchmarks?

And now for an update on what’s happening with the ongoing European debt crisis (which, as President Obama is constantly reminding us, is one of the many “headwinds” facing global economic recovery) after the summer slowdown. Debt-wracked Greece, already under obligation to implement major austerity measures after receiving Euro bailout money, is asking for a timeline extension to allow their economy to absorb the spending cuts at a more gradual pace — kind of a lot to ask from a country walking on a razor’s edge of credibility, if you ask me, but EU leaders say they’ll investigate whether Greece has earned an extension next month. The Guardian reports:

Greece’s hopes of being granted more time to hit the targets imposed by its international creditors have received a setback when EU leaders refused to make a decision until next month.

German chancellor Angela Merkel and Luxembourg prime minister Jean-Claude Juncker both warned that Greece’s future depends on the verdict of its troika of lenders, who will announce in September whether Athens is meeting the terms of its existing bailout programme.

Greek officials say that a two-year extension would not require a formal third bailout.

The estimated €20bn cost could be funded by tapping an IMF loan facility, more short-term debt, and by postponing debt repayments, they say.

Do you suppose that merely delaying the inevitable dosages of tough medicine will make them any less unpleasant when they finally happen? I realize this is a sparknotes-style version of things, but you have got to put a stop to the vicious cycle, Greece — money has to come from somewhere, and Germany in particular is not appreciative.

German Chancellor Angela Merkel faces one of the toughest choices of her career in the coming weeks: whether to risk the unraveling of the euro zone or her government.

After a summer lull, Greece is again Ms. Merkel’s biggest headache. The Greek government, struggling with depression-like conditions that have pushed the economy to the brink, is likely to need many billions of euros of additional aid to avoid bankruptcy.

If Athens doesn’t get the money, it may be forced to leave the euro, an outcome that would undermine financial markets’ tenuous confidence in other vulnerable southern euro members, including Spain and Italy. …

Since the euro-zone crisis began in Greece in late 2009, critics have accused Ms. Merkel of playing for time, putting off difficult decisions until the last minute. Greece’s penury could force her hand, however: Athens could run out of cash by October unless European authorities and the International Monetary Fund release its next slices of international aid. But for the IMF especially, that requires the bailout math for coming years to add up.

Kind of a cruel twist of fate that Germany is one of the few euro nations that’s handled it finances with a modicum of sanity in recent history, and they’re the ones being pushed and pulled in every direction and covering everybody else’s behinds. But, then again, it’s not like nobody could’ve predicted that this whole Eurozone idea would turn out to be a hot mess, could they?

The euro is the world’s first currency invented out of whole cloth. It is a currency without a country. The European Union is not a federal state, like the United States, but an agglomeration of sovereign states. European countries are plagued by rigidities, including those in labor markets—where language differences and the protection of trades and professions in many countries impede labor mobility. That makes it difficult for their economies to adjust to cyclical and structural economic shifts.

For such reasons, when the euro was created in 1999, Milton Friedman famously predicted its demise within a decade. He was wrong about the timing, but he may yet be proven right about the fact.