The situation in Greece remains a top concern for the European Union. A tide of social unrest has swept the country as is struggles to handle its worst ever budget deficit of more than 12 percent of the gross domestic product and its enormous public debt of about 300 billion euros, equivalent to about 12.5% of GDP.
The Greek crisis came at a tough moment for the European Union, becoming a test of strength for the idea of "euro-integration". Since April 2004, the Union has grown from 15 to 27 member-states. As it expanded politically and economically, wealthy West European nations assumed responsibility for their poorer partners. Greece proved the weakest spot in this chain. Heavy borrowing and overspending put it on the brink of default.
France and Germany, the two locomotives of the "euro zone", have pledged a 30-billion aid package for Greece. The bailout plan approved by the European Central Bank is scheduled to begin during the Easter holidays. Despite opposition from many EU member-states, the prestige and stability of the "euro zone" prevailed. Calls are becoming louder for a supranational anti-crisis fund to help struggling EU economies. The idea does seem logical, although it is easy to guess which of the future fund's members are doomed to be the donors and which ones will be the recipients for good.
Back to Greece, Boris Shmelyov, a prominent Russian analyst, is skeptical that the proposed bailout package will improve the situation:
30 billion euros is big money for Greece, but its debt liabilities to donor countries in the current year amount to 50 billion euros. The aid package will certainly ease the strain but will hardly solve the problem. The signs are, however, that Greece will not be left at the mercy of fate. As an EU member-state it will be granted help to prevent a possible default fraught with dire implications for the euro and eventually for the European Union's global prestige.
Please rate: