Atlantic Community:Global Must Read Article "Greek Austerity Drama"

Greek Austerity Drama

Editorial, The Independent | June 30, 2011

It is still far from clear how the Greek saga will conclude. ++ The adoption of the austerity package sparked riots and sharpened the question of whether “the increasingly rebellious Greek public” is ready to meet the severe cuts. ++ In case of a default the country is likely to be excluded from the eurozone and markets’ attention would switch to the next “weakest link”– Spain. ++ The example of Ireland which accepted four austerity budgets in a two-year period and yet continued its negative growth only strengthens Greek scepticism.

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Thu, Jun 30th 2011, 21:26

Soledad Mancheno, NYU, (2)

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From the financial market point of view, any crucial vote and condition on the latest austerity measures will be celebrated but on a very short term basis. I think that even if Greece passes the austerity measures, I think the talks about Greek defaulting will continue to influence over the financial markets. In my view, after the austerity measures have passed, there will be the question of how will these austerity measures be implemented. The government of Greece has a lot of work ahead of them, especially in trying to restore its reputation and cofidence. The social unrest in Greece is something the government must manage, but that is a difficult job if the country is not only undergoing a social and economic crisis, but also political instability. Will this weak government manage to deliver the necessary changes that the austerity measures require. I think Greece will need more than one austerity package. Greece will need to really committ to long term reform.

Fri, Jul 1st 2011, 04:54

Marcella Marucci, New York University- MSGA, (8)

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I agree that Greece will need to commit to a long-term reform-- only with long-term reform can a country get back on its feet after such a financial crisis. However, I do not believe that in the case of default Greece would be kicked out of the euro-zone. It is not in Europe's interest to lose Greece and have it unravel to become an even more unstable neighbor vulnerable to further disequilibrium. France and Germany have pushed for Greece to comply with austerity measures and as long as they have any say, they will not let Greece default.

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Greek Austerity Drama

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