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Brussels sees lack of decisiveness by the Greek government

19 January 2010 / 16:01:12  GRReporter
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The stability and development program of the Greek government was adopted with caution and scepticism at the meeting of the Eurozone finance ministers in ECOFIN. EUROGROUP President Jean-Claude Juncker evaluated the plan as "a good first step” for the consolidation of public finances, but is explicit that the PASOK government must take more radical measures to deal with the economic crisis in the country. 

"I think the Greeks take steps in the right direction, but they are not enough to rescue the economy," Juncker said. The general opinion of European economists is that this three-year Program for stability and development is too optimistic. The underlying cuts with four points this year of the state deficit and with two to three more points during the next few years is considered unrealistic. Eurozone finance ministers have agreed that Greece should deal with its economic problems alone without financial interference from other European Union member states. One of the main supporters of this thesis is German Finance Minister Wolfgang Schäuble, who stressed: "We have a new government in Greece, which has to cope with the difficult task (restoration of economic stability in the country). We will support the country in achieving effective results, but this does not mean that Greece will be released from its obligations to implement appropriate measures." 

The European Commission wants guarantees that the estimates for tax revenues and cuts in government expenses will be reached. There are many questions about the revenue that the government expects to collect from measures in combating tax evasion and improving the social security contributions, which according to some international financial analysts has been theoretical. HSBC Experts claim that Greece has a threefold problem: high state deficit, lack of external competitiveness and reliability. In its latest report, Deutsche Bank says that the possible bankruptcy of Greece will be larger than the one of Russia (1998) and Argentina (2001) all together, if the country's government does not take more decisive measures.

Tags: ECOFIN Brussels Economy in Greece EUROGROUP
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