I was able to find an article in The Economic Times which was closely related to the issues we discussed today in class about Greece's serious economic issues. As we talked about earlier Greece is either going to need a bailout, which will be costly for other European nations, or it is going to have to massively cut its deficit. It currently looks like Greece is going to pursue the later of the two options and has already cut wages.
A bailout for Greece by the other members of the EU is still an option but Austrian Finance Minister Josef Proell that Athens would have to handle themselves first but the EU stood behind them. Also saying that, should it be necessary, "Germany, France and others -- there (would) be a group of countries who can give this money to Greece to stabilize the country and also the euro zone."
March 16th stands as the deadline for Greece to demonstrate that its economic plan is being carried out. Following this deadline Greece will also have to report in May and every three months afterward in order to make sure that progress is being made.
Given Greece's current economic situation do you believe this course of action by the EU is the best one, or is there another alternative? Do you believe that Greece will be able to refinance the two lots of debt they owe (estimated at of 8 Billion Euros each) before their time is up?
http://economictimes.indiatimes.com/News/International-Business/EU-tells-Greece-more-deficit-cuts-may-be-needed/articleshow/5582137.cms?curpg=2
Subscribe to:
Post Comments (Atom)
Since the European Union has always supported a fellowship between the countries it consists of, I think that this course of action is absolutely necessary. However, due to the massive amount of debt that the country is in, I'm not sure that March 16 is a realistic deadline.
ReplyDeleteA
I agree that this is the correct course of action, allowing the country to work out problems it created on its own (instead of having a pseudo financial market FAIL like in the US) with backing if things become to much for the union to bear based on it's contractual obligations. However i do disagree with Bridgett when she states that March 16 is not enough time, if Greece can show concrete evidence that it can edit its budget in under a month in the midst of a national crisis then its no better than the united states government and deserves to face some consequences. strict times call for even stricter measures.
ReplyDeleteA
Although I think it's necessary, it points out the major flaws in the EU. For one, the reason the US works with State and Federal Government, is that a constitution and an established knowledge of who has was authority. The EU however, established an economic policy before a political policy which explains how the current situation of EU states with power and money, like Germany and France, are basically going to decide what Greece's outcome will be, regardless of their, or other member states' intentions. A
ReplyDeleteI think that either course of action would result in problems. A bailout would put a strain on the economy of France or Germany, while austerity is going to hurt the citizens of Greece. I do think that Greece should be responsible for its own actions, but from what I've seen in class, making budget cuts is mostly going to discourage and incite Greek citizens. Personally I think Greece should just get off of the Euro system, if possible, though I'll be the first to admit that I'm not entirely sure how it works.
ReplyDeleteI agree that Greece should be taken off the Euro system. It is very different than Germany and France for its older population and that it does not produce many goods. Even though Greece is struggling right now, it may help to stabilize them in the long run. If Greece is separated from a system that didn't help them in the first place and that is involved with countries that are unwilling to help them now, it may be better for them in the future. T
ReplyDeleteI think that of all the ways to go about helping Greece this is probably the best. I don't really know enough about Greece's situation to say as to whether or not I think that they will be able to pay back all their debt, but 8 billion euros is quite a bit of money and I'm not sure how they plan to pull that off.
ReplyDelete