Just eight years after adopting the euro, Greece has become a trouble spot for the stability of the currency. The country has fallen into a recent economic downslide that threatens its national credibility and the economic integration of the European Union.Ioulia Bespalova | The Mount Holyoke NewsAccording to a recent article in The Economist, Greece’s dire economic position has called for debatable measures both nationally and in the euro zone. Greek citizens would see a cut in earnings ranging from four percent to 50 percent, a rise in the retirement age from 58 to 61 and a stricter tax system that would demand more returns from richer citizens and large property holders.
In the euro zone, member states have shown varying degrees of reluctance to help Greece. Highest on the list is Germany, which is one of the richest EU states. Its national response to Greece’s situation has been that Greece should sort itself out on its own. The German chancellor Angela Merkel has been vague about promises of a financial rescue plan but together with other EU member states, Germany has insisted that Greece get its deficit below three percent of Gross Domestic Product (GDP) by 2012, starting from a 4.7 percent cut this year.
Last month, Greek public workers responded to this economic insecurity with a contained union-organized protest. But protests have followed closely, reflective of the fearful state of insecurity that has gripped the citizenry. The EU appears to be in a more fretful position, knowing that they cannot ignore the problem at hand.
After all, EU countries share a common currency, the euro. The euro’s already shaky condition could not withstand a major blow like the bankruptcy of Greece. At present, the EU also worries about other member states like Portugal, Italy and Spain who are facing similar economic crises.
But last week’s actions and steps on the side of Greece have raised some hope. The country was able to raise $7 billion by selling government debts in bonds and imparting their austerity packages back at home. These moves have apparently helped to change the uncollaborative attitudes of euro zone member states towards Greece. Though none have has promised to offer any bailout funds, they seem willing to work with Greece to get its economy on track. According to Bloomberg, the outcomes of the March 7 meeting between French president Nicholas Sarkozy and Greece’s prime minister George Papandreou resulted in a definite statement of support from the EU member states.
Greece has been cleaning up after itself, though at a high cost. According to the New York Times, more strikes and riots have broken out in Greece, especially in the capital of Athens. Public relations between Greece and Germany are also deteriorating. In Germany the public blames the Greeks for their own financial dilemma and do not feel obligated to help them out. They accused the Greeks of corruption, tax evasion and insincere financial reporting. Two members of Germany’s governing coalition even recommended that Greece sell off some of its uninhabited islands.
Even though the economic and political situation in Greece is far from stable, Papandreou is confident that will simmer down. With support building up from the EU, Greek officials are ready to rein back the nation to its former standing as a stable capitalist economy in the euro zone. So with a bruised pride and smarting ego, Greece has taken its fair share of blame and is slowly climbing back to normal.
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