Greece in 'Great Depression'
AFP PHOTO / ANGELOS TZORTZINIS
Greek Prime Minister, Antonis Samaras, compared the current situation in Greece with the Great Depression that devastated the American economy the 1930s, during a meeting with the former US President Bill Clinton.
Samaras and Clinton met on 22 July, two days prior to a visit of a team of Greece's international lenders, who aim to enforce further austerity measures on the battered nation. Cuts are among prerequisites for further granting Greece additional rescue payments and avoid a default.
Last March, Athens agreed a comprehensive memorandum with the European Union and the International Monetary Fund on a €130 billion bailout. However, following the two rounds of general election in which anti-austerity and anti-EU parties were progressively gaining more votes, the new government aims to re-negotiate the agreement in order to reduce severity of the austerity on the country's economy and especially job creation.
This year marks fifth consecutive year of recession in Greece, which started in 2008. It has been estimated that over the course of that period, the Greek economy contracted nearly 20%, with joblessness reaching record 22.6% this year.
"You had the Great Depression in the United States. This is exactly what we're going through in Greece - it's our version of the Great Depression," Samaras told Clinton, who was visiting the country with a delegation of American businessmen.
Greece was tasked with reducing its budgetary deficit to below 3% of GDP by the end of 2014, from 9.3% last year. However, Athens is now trying to negotiate additional two more years to achieve the deficit goal, in order to prevent an even deeper economic decline.
Lenders have opposed the idea, as it would mean even more financial aid and continuation of financing the country's basic functioning. There are even speculations going as far as suggesting that the IMF would not take part in any additional financing for Greece.
German economy minister, Philipp Roesler, told ARD he did not expect Greece could fulfil its requirements and that therefore it would mean an end to financial support to Athens. "I am more than sceptical," Roesler said, and stressed that "if Greece does not fulfil its requirements, there cannot be any more payments to Greece".
Roesler is the chairman of the junior coalition partner, the free liberals, whose popularity plunged during the mandate of this German government, but which aims to build the platform for the forthcoming elections on strong stances on the Eurozone and fiscal soundness.
President Clinton pointed out flaws of the austerity-only approach of the lenders, emphasising that Greece would be more likely to consolidate its deficit and indebtedness if its achieves economic recovery first.
"People need something to look forward to when they get up in the morning - young Greeks need something to believe in so they can stake their future out here," Clinton said. .europe on line
No comments:
Post a Comment