Thursday, January 15, 2015

Greece: Europe's Great Economic Black Hole

Greeks will go to the polls on January 25. The outcome may lead to debt repudiation, other severe losses on assets and the beginning of the end of the common currency. Even if Europe avoids the worst, the best anyone can hope for is heightened levels of uncertainty. It is not a pretty picture, and the blame for this mess is so widespread that it would take a book just to name the people and institutions responsible.
Greece has for some time occupied the epicenter of Europe’s troubles. It was, after all, Athens that in 2009 triggered the continent’s still-raging fiscal-financial crisis by admitting that it had fibbed about its financial health. Since, Greece has received two European Union (EU) bailouts, totaling €240 billion, each conditioned on budget austerity and other economic reforms pressed by the EU, the European Central Bank (ECB) and the International Monetary Fund (IMF)—the so-called Troika. These reforms included measures to privatize government assets and steps to make the economy more dynamic and competitive through labor-market and regulatory reforms. Greece has stuck to its promised budget austerity, though not without considerable angst and political close calls. Though Troika monitors remain disappointed about other reform efforts, they had pretty much concluded that Athens had come far enough to emerge from bailout strictures. The country’s budget had, they noted, balanced and the economy was beginning to grow, albeit haltingly and from a deep recession.

http://nationalinterest.org/feature/greece-europes-great-economic-black-hole-12036 

No comments: