Could members of EU Club face expulsion?
If the USA was a member of the EU, we might be in the same pickle as Greece.
“’The government is burdening the economy with new taxes. This brings more recession, not smaller deficits,’ said conservative opposition leader Antonis Samaras after a meeting with Papandreou.”
If sovereign members of the EU don’t get their act together, what is the next step?
Observing the situation, I keep hearing something in my head, “all things equal.”
If generally most nations and their economies are in the same boat, have we not reached a new equilibrium? If so, what does it mean?
“Greek PM tries but fails to win political consensus
By George Georgiopoulos and Ingrid Melander
ATHENS, May 24 (Reuters) - Greek Prime Minister George Papandreou sought but failed to get consensus from opposition leaders on Tuesday on a new set of austerity measures aimed at averting default.
Desperate to secure the next tranche of a 110 billion euros EU/IMF bailout, Athens decided on Monday to jump start privatisations and push through six billion euros worth of extra fiscal measures to convince lenders and markets it can pay down debt without restructuring. [ID:nLDE74M0F4]
Paymasters at the European Union have said clearly that broad political consensus on the way forward is necessary for more aid, given the need to plug a funding gap next year caused the country's inability to be able to borrow on the markets.
Papandreou, whose party has a comfortable lead in parliament but is sliding in opinion polls, called opposition party leaders in an effort to get them on board, but without success.
"The government is burdening the economy with new taxes. This brings more recession, not smaller deficits," said conservative opposition leader Antonis Samaras after a meeting with Papandreou.
"I am not going to agree to this recipe which has been proven wrong," he said, adding that his party favoured privatisations but not rushing to sell-offs in a state of panic.
The euro EUR= fell briefly and safe haven German bond futures rose after his statement.
The EU's top economic official Olli Rehn warned Greece would get no further aid unless there was broad political consensus, as was the case inIreland and Portugal. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Graphics on debt crisis: r.reuters.com/hyb65p Other euro zone crisis stories [ID:nLDE68T0MG] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
On Monday, Greece unveiled a series of privatisations, part of a goal to raise 50 billion euros by 2015 to pay down its debt mountain, starting with divestments in Hellenic Postbank (GPSr.AT), OTE Telecom (OTEr.AT) and the two biggest ports.
It also said it was working with the IMF/EU inspectors on finalising extra fiscal measures worth 6.4 billion euros as part of a mid-term plan aimed at continued funding.
Finance Minister George Papaconstantinou raised the stakes on Monday, saying the International Monetary Fund would not release its share of the June aid payment unless the EU undertakes to cover Athens' 2012 funding needs.
"The IMF has made absolutely clear that it cannot disburse if it does not have any guarantee that next year, if necessary, Greece will have (funding) support from the Europeans," he told Skai TV. [ID:nLDE74M21J]
Ongoing speculation about a possible restructuring drove the cost of insuring Greek debt 22 basis points higher to 1,435 on Tuesday. The yield spread of 10-year Greek bonds over German bunds held above 1,400 basis points, with two-year paper yielding 26.5 percent.
Rating agency Moody's warned on Tuesday that even a voluntary debt restructuring would have serious repercussions, not just for Greece but for other stressed sovereigns in the euro zone, which could be downgraded to junk status. [ID:nLDE74N0JZ]
"A Greek default would be highly destabilising and would have implications for the creditworthiness of issuers across Europe," Moody's chief credit officer for EMEA, Alastair Wilson, told Reuters. [ID:nLDE74N0AQ]
Reiterating the European Central Bank's firm objection to such policy options, France's central banker Christian Noyer said a Greek debt restructuring would be a "horror scenario" that would be tantamount to default, shutting Greece out of debt markets and derailing a recovery. [ID:nLDE74N0VF]
Still, a Dutch newspaper reported that euro zone governments were secretly preparing for an extension of Greek debt maturities alongside the creation of an independent institution to sell Greek assets. [ID:nLDE74N0KN]”