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
TEXT SIZE - +

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

Multimedia Relatives of South Korean Ferry Victims Fire at Authorities

46 people are confirmed dead, but some 250 remain trapped inside sunken ferry More

War Legacy Haunts Vietnam, US Relations

$84 million project aims to clean up soil contaminated by Agent Orange More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends 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.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid