Guardian
Editorial
June 16, 2011
It was never really in doubt that Greece would get the money it would need to stay afloat for a few more weeks. The attempt by the IMF to dictate the terms of the rescue to the eurozone, by threatening to withhold the next €12bn tranche of the bailout package agreed last year, was never going to work. Nor can there now be much doubt that a second EU support programme will be agreed this Sunday. Each move, however, will simply postpone judgment day.
Greece cannot dig its way out of the mountain of debt it has now been placed under, and that reality was clear months ago. Since then, a political reality has been born. Even if he manages to stitch together a cabinet and win a vote of confidence from his party, Pasok, to force through a second austerity package to avoid default, prime minister George Papandreou has run out of road. So there is neither a workable plan nor, crucially, a political consensus in Athens to enforce one, let alone one including mass privatisation. Even if Greeks could be coerced into accepting more pay cuts and state sell-offs, most are convinced, probably rightly, that more austerity will just damage the economy further. Remember, they have already been taking the medicine for the past year, since public workers took a 20% pay cut. It has not worked. Greece has missed the targets set in the current bailout due to a deep recession and the chronic revenue shortfall, and debt is still projected to hit 160% of GDP. Now they are being asked to take another dose, this time in the form of tax rises.
More
No comments:
Post a Comment