New York Times
June 21, 2011
Greece’s prime minister, George A. Papandreou, comfortably survived a confidence vote on Tuesday, momentarily stabilizing his fragile Socialist government and clearing the way for a fresh infusion of financial assistance from the European Union.
But the country’s economic crisis, which began at the end of 2009 when the world belatedly realized that Greece’s fiscal and trade deficits were unsustainable, is far from over; in fact it has taken a new and dangerous turn.
The specter of a default on Greece’s sovereign debt — close to $500 billion, most of it owed to other Europeans — is haunting bankers and politicians. It could set off domino effects in the euro zone and beyond. Without urgent domestic reform and help from its European partners, Greece, a country of only 11 million people, risks being caught in an unbreakable cycle of decline.
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