February 6th, 2012
Econintersect: Greek political leaders have not been able to reach agreement on acceptance of imposed austerity measures needed satisfy demands from the European Commission for implementation of a €130 billion bail-out. The leaders are concerned that the austerity could impose “more recession than the country could stand.” There is already talk that an additional €15 billion could be needed due to deteriorating economic conditions in Greece, according to the Financial Times. Greek leaders are far apart on proposals to cut private sector wages by 25%, pensions by 35% and thousands of public sector job cuts.
The disorderly default on debt could come as early as next month in spite of a massive write down in principal value of Greek government bonds agreed to by European banks recently (GEI News).
Further problems are brewing with Portugal now appearing not to have the economic wherewithal to manage enough growth in a severe austerity program to satisfy their bailout condition, according to The Wall Street Journal.
GEI Analysis Blog and Opinion Blog articles listed below have given in depth looks into the economic contraction and sovereign debt problems of the Eurozone periphery countries.
Sources and References:
- Greece takes a step closer to default (Kerin Hope, Alex barker and Quentin Peel, Financial Times, 4 February 2012)
- Greece Solution Near? (GEI News, 30 January 2012)
- Portugal’s Few Exports Bring Bailout Scrutiny (Matthew Dalton, The Wall Street Journal, 6 February 2012)
- The Coming Resolution to the European Crisis (by Fred Bergsten and Jacob Funk Kirkegaard, GEI Analysis)
- The Great Geopolitical Swing of 2012 (LEAP/E2020, GEI Opinion)
News articles cited were found on Econintersect Europe newspaper page.