June 21, 2011
When it comes to the euro crisis, Europe means business. That, at least, is the message sent by the decision to withhold a vital aid tranche until Greece passes a far-reaching austerity package next week. But the move could backfire.
One could be forgiven for thinking that hurdle races, long an Olympic discipline, originated in Greece rather than in England. Particularly these days. Prime Minister Giorgios Papandreou is doing all he can to keep his government together and prevent his country from going bankrupt. But the obstacles -- a full year after the European Union and the International Monetary Fund put together a €110 billion aid package for the country -- are myriad. And high.
The next hurdle is scheduled for Tuesday night at midnight, Athens time. Papandreou, himself an enthusiastic runner, faces a confidence vote in the Greek parliament. With his party holding 155 of 300 seats, his margin for error is thin. The conservative opposition has vowed to vote against him.
For once, however, all signs seem to point toward a Papandreou success. After a turbulent week, the markets have settled in anticipation of the prime minister surviving the confidence vote. Furthermore, a cabinet reshuffle late last week was successful in forestalling a full-fledged revolt within Papandreou's socialists. Many parliamentarians, to be sure, are finding it difficult to support yet another raft of austerity measures. There is, however, no alternative in sight.
But even if Papandreou survives Tuesday night's vote, the next hurdle is on the horizon. On June 28, the Greek parliament is to vote on a critical new package of austerity measures. Should it fail, it could result in a dramatic worsening of the crisis facing the European common currency.
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