Dangerous brinkmanship
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- Parent Category: Columns
- Category: Business view
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22 Feb 2012
TENSIONS are rising in Europe. The object of contention, of course, is the current Greek bailout. The creditor nations are becoming exasperated at Hellenic foot-dragging. The Greeks are getting frustrated at our increasingly stringent demands. Arguments about loans are as old as the institution of credit, but this quarrel has implications for our entire economic system.
SEVERAL nations (including Finland, according to reports) are displeased with Greek actions, or rather inactions. They are not reforming as quickly as we would like. Privatisations are proceeding at a tepid pace. Spending cuts are slow to be enacted and revenue enhancements have failed miserably. We are losing patience with the debtor who, we think, keeps asking for more money but does nothing to fix the underlying problem.
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THE Greeks are shocked at our arrogance. We don’t trust their word, so demand signed pledges to follow the plan. We install keepers to look over shoulders and give opinions if the reforms are proceeding or not. If reports can be trusted, we have even suggested when Greece can have elections and who should be in the cabinet.
TEMPERS have flared. The German Finance Minister Wolfgang Schäuble likened Greece to a “bottomless pit.” The Greek President Karolos Papoulias retorted “Who is Mr Schäuble to revile Greece? Who are the Dutch? Who are the Finns?”
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