Friday, August 24, 2012

Europeans to Debate Further Aid for Greece

New York Times
August 23, 2012

Vacation is over early this year in the euro zone, with Greece and its shaky future back on the table and Spain waiting in the wings to ask for help from European bailout funds.

The political debate in Germany over the euro has resumed at a heated level, Italy is preparing for a spring election and the new Socialist government of France must come to grips with how it will meet its own deficit targets for next year when growth is close to zero.

“September promises to be pretty dramatic in the euro zone,” said Megan Greene, director of European research at Roubini Global Economics.

The first problem for euro zone leaders is Greece. After two rounds of legislative elections, the Greeks finally gave the center-right leader Antonis Samaras enough votes to form a coalition without the leftist party Syriza, and he has spent the summer trying to find another $14.5 billion in spending cuts and new revenue over 2013 and 2014 to qualify for the next round of bailout money it needs to stay solvent.

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