http://money.cnn.com/2012/02/07/markets/greece/index.htm?iid=HP_LN
Greece's clock to negotiate more measures to ensure it is given a second bailout by the International Monetary Fund and European Union. The deal being brokered is further austerity measures to balance the Greek budget. Austerity measures have already been placed in Greece, but further budget cuts are needed to satisfy the IMF and EU. The EU needs to bail out Greece and other nations who are part of it in order to avoid a "financial shock:" if the nations pull out.
The Greek's recognize that austerity will have "high social costs," but recognize that this may be the only way. It is important to note that austerity measures have so far not helped the Greek economy. The economic growth predictions for Greece has shrunk in response to more austerity plans.
3 comments:
Do you this Greece will end up failing, or will they be able to figure out an agreeable bailout?
I was just recently reading an article on CNN that was posted shortly after this one explaining the current political situation that accompanies this Greek economic crisis. It described the government facing a crucial test this weekend on voting for the austerity reforms. The government, it seems, has no choice in whether to approve or not to make sure they don't go bankrupt. Anyone who disagrees with the new program being put in place will not remain in the government. It will be interesting to see if this new program ends up working, or because of the desperate situation Greece is facing, the possibility of the new program being put through prematurely may put Greece in a more dire situation.
Understanding that politics and economics are so tied together, it's difficult that the hands of political leaders are tied in this circumstance. The new program could definitely help the crisis occurring in Greece currently, but I wonder if it will be enough and if it will be implemented soon enough.
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