Greece Still Scrambling to Meet Austerity Demands
Greek leaders are being forced to specify another $325 million in budget cuts in order to satisfy EU lenders who are set to vote on whether Greece will get an additional tranche of bailout funding.
Despite continued rhetoric that agreements had been reached and all demands had been met, Greek leaders are scrambling at this moment to identify another $325 million in budget cuts in order to satisfy EU demands. The cuts were noted, but not itemized in the original agreement, and EU leaders are not going to allow for any possibility of misunderstanding as they hammer out the terms of their crushing austerity pledges. Even with the 11th hour drama, most observers fully expect the deal to be pushed through, which should buy Greece at least another few months before its debts once again become overwhelming.
The real key for the EU, however, is to buy enough time for the other debtor nations in the EU to somehow manage to get things under control. Italy, Spain, Portugal and Ireland are still struggling with their own debts and attempts at austerity measures. Moody's announced downgrades of six debtor nations and also put the UK, France and Austria on negative outlooks pending new macroeconomic data about the struggling Euro.
If its leaders were wise, Greece would use the next tranche of bailout funds to better prepare for an orderly default and exit from the Euro. This next round of funding will also come with a 70% reduction in debt from private lenders, so Greece will be in a better position to attract outside financing to make a smoother transition to its native currency.
Of course, such talk is outside the accepted focus of EU leaders, who would rather see unrealistic austerity measures attempted and massive civil unrest, than risk exposing the Euro and EU has a failed social and political experiment.
The real key for the EU, however, is to buy enough time for the other debtor nations in the EU to somehow manage to get things under control. Italy, Spain, Portugal and Ireland are still struggling with their own debts and attempts at austerity measures. Moody's announced downgrades of six debtor nations and also put the UK, France and Austria on negative outlooks pending new macroeconomic data about the struggling Euro.
If its leaders were wise, Greece would use the next tranche of bailout funds to better prepare for an orderly default and exit from the Euro. This next round of funding will also come with a 70% reduction in debt from private lenders, so Greece will be in a better position to attract outside financing to make a smoother transition to its native currency.
Of course, such talk is outside the accepted focus of EU leaders, who would rather see unrealistic austerity measures attempted and massive civil unrest, than risk exposing the Euro and EU has a failed social and political experiment.
Like This Article?
Follow:
Post Comment