News / Europe

Greece Faces New Austerity Hurdles

Demonstrators gather in front of the Parliament in Athens' main Syntagma Square, June 15, 2011
Demonstrators gather in front of the Parliament in Athens' main Syntagma Square, June 15, 2011

The European Union's top economic official says he expects eurozone finance ministers to sign off on the payout of $17 billion in aid for Greece on Sunday and decide on a new bailout in July. The news comes on the heels of the prime minister of Greece reshuffling his Cabinet in an effort to push through a tough austerity package that has many Greek citizens in uproar.

EU Economic Affairs Commissioner Olli Rehn said Thursday the two-step approach means that the funding of the Greek debt can now be ensured until September, saving it from the immediate risk of default. But, he said, a decision on a new longer-term bailout will be delayed until July amid disagreement over the role of private investors.

Rehn said it was "regrettable" that the efforts to build national unity in Greece failed Wednesday, but that he still expected parliament to pass new austerity measures.

On Wednesday, Greek citizens came out in the tens of thousands to protest the measures that Prime Minister George Papandreou is determined to push through parliament.

In this image taken from TV, Greek Prime Minister George Papandreou, talks to the nation in a live TV broadcast, June 15, 2011, in Athens
In this image taken from TV, Greek Prime Minister George Papandreou, talks to the nation in a live TV broadcast, June 15, 2011, in Athens

Papandreou responded by saying he will reshuffle his Cabinet and seek a vote of confidence for his new government in parliament.  Papandreou added he will continue on what he called the "road of duty," together with his party members, officials, and the Greek people.

His plan to reshuffle the Cabinet came on the same day that anti-austerity riots hit Athens and coalition talks with the opposition failed.

Even some members of Papandreou's Socialist party are not behind his measures. On Thursday, two lawmakers from his party stepped down.

In Greece, the reaction to Papandreou's policy was mixed.  A recent poll carried out by a market research company called Public Issue showed the main opposition party is beating the ruling Pasok socialist party in voter support.

Greek citizen Amalia Stinga says the prime minister is not making the effort he needs to make.  She believes Papandreou is afraid. She adds that if he were not afraid, he would have done things differently.

Greece is in major debt and unable to pay back the money it owes.  Last year, the European Union and the International Monetary Fund (IMF) pledged multi-billion-dollar loans in order to help Greece out of its financial troubles. But that money is conditional upon a tough austerity program.

Simon Tilford, chief economist at the Center for European Reform, based in London, says the current political turmoil in Greece was unavoidable given the terms set by the EU and the IMF.

"What they are trying to do is almost impossible economically," noted Tilford.  "The Greeks have met the terms of their fiscal austerity program. They have cut public spending by more than any other developed economy has ever done in such a short space of time. But because those public spending cuts have hit economic growth harder than the EU or the IMF thought they would, they are still in breach of their agreement."

Tilford adds that there is a limit to how much any country can cut spending. And right now, spending cuts are only serving to stifle the Greek economy. He calls the situation a "death trap."

"Unless there is a change of track by the EU and the IMF, further political instability is all but guaranteed," Tilford noted.

On Thursday, world stocks hit a three-month low and the euro slumped to a one-month low.

You May Like

Taliban's New Leader Says Jihad Will Continue

Top US Afghan diplomat also meets with Pakistani, Afghan officials following news of Mullah Omar's death More

Video US Landmark Pushes Endangered Species

People gathered in streets, on rooftops in Manhattan to see image highlights that covered 33 floors of Empire State Building More

World’s Widest Suspension Bridge Being Built Over Bosphorus

Once built, Yavuz Sultan Selim Bridge will span 2 kilometers with about 1.5 kilometers over water, and will be longest suspension bridge in world carrying rail system More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Iraqi Yazidis Fear Death of Their Communityi
X
Sharon Behn
August 03, 2015 2:23 PM
A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs