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Juncker: “Stricter measures are needed for expenses cuts”

01 March 2010 / 10:03:03  GRReporter
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This stated the president of the Euro zone Jean Claude Juncker regarding the Greek economic crisis. “The citizens of the wealthier European countries wouldn’t want to pay for the mistakes of the former Greek governments. Greece has to focus on the earning of income and more restrictions on the expences.” Juncker who, besides the president of the Euro zone is also the Prime Minister of Luxembourg said that his country is ready to help Greece, “however the Greeks have to prove that they have done everything in their powers to help themselves.”

The German chancellor Angela Markel shares the same opinion: “We are very pleased that the Greek government shows courage and plans ambitious measures in order to take the situation under control.” Markel is meeting with Papandreou on Friday, March 5th in Berlin. The newspaper Financial times published an information that the German banks are ready to purchase Greek government bonds which will be guaranteed by the German banks. This proves the rumors that Greece will try to make a second emission of government bond to be true. The first emission was in January and it ended successfully, but at a price which is very unprofitable for Greece.

According to the western European analyzers the Greek government is ready to announce more measures for the decrease of the deficit may be even early this week after the visit of Olli Rehn in Athens, the European commissioner of the economic and financial matters. These measures are expected to be a 30% increase of the excise duty for the alcohol and tobacco, an increase in the VAT and decrease in the salaries of the public employees. This is expected to provide about 2% of the GDP (about 5 billion euro). Greece owes premiums on the bonds for the amount of 22 billion euro until the end of May. Last week the Prime Minister Papandreou assured the investors that Greece has enough finances to cover these liabilities.

In the past week Greece was the top news for another reason as well – the derivatives which the country has purchased from Goldman Sachs and other big investment banks in order to cover the amount of its debts by taking advantage of the exchange rate of the dollar compared to the euro and also to slow down the payments of its debts, so that it wouldn’t have to announced them as part of the figures for the national debt. The American government started an investigation of the case.

Tags: Juncker euro zone Greek economic crisis
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