Greece warned to act over default risk

Discussion in 'Wall St. News' started by ASusilovic, Dec 13, 2009.

  1. Greece must announce bold initiatives in the next few days to rescue its collapsing bond market and avert the possibility of defaulting on a rising public debt, leading economists and bankers warned on Sunday.

    George Papandreou, prime minister, will outline structural reforms on Monday aimed at cutting the budget deficit from 12.7 per cent to 3 per cent of gross domestic product – the limit allowed by the eurozone’s stability and growth pact – over the next four years.

    But observers were pessimistic on Sunday night that Mr Papandreou would reverse his current policy and call for an immediate freeze on public sector wages and higher excise taxes.

    Such measures are seen as critical to lowering spreads on Greek bonds and restoring confidence in the economy.

    “Greece has to show it understands the magnitude of the crisis,” said Nikos Karamouzis, deputy chief executive of EFG Eurobank, the largest private Greek lender.

    “This means implementing immediately very radical and painful measures. This is what international financial markets and our European partners are demanding,” he said.

    Ireland last week announced unprecedented cuts in public sector wages and unemployment benefits, while Spain promised a 4 per cent reduction of spending in its 2010 budget amid pressure on bond markets.

    Bad news for European consumers and workers. Higher taxes, lower wages. Should not be supportive for a consumer driven economic recovery...
  2. Cancel your New Years party plans in Athens.:cool:
  3. Glad you told me. I switched them to Madrid.
  4. Stay out of the Basque Region. :cool: