The Troika trying to manage Greece’s path to normality – the European Union, European Central Bank and the International Monetary Fund – struck an upbeat tone as they broke out from meetings in Brussels Friday, but the reality is one of long lasting pain for the Hellenes with little progress after a five year austerity plan.
The Troika and the Greek Prime Minister George Papandreou are now at least singing from the same hymn sheet and the numbers look like this in the final package: $40 billion in higher taxes and cuts in spending until 2015. Privatisations have been put down to raise $72 billion and at late night Thursday the new Greek finance minister, Evangelos Venizelos, closed a $5 billion budget short fall with a final burst of tax increases and spending cuts. Final tally now: $117 billion.
Some would take an entirely different view. Eighteen months ago the European debt storm was just beginning to take shape and Greece was the first in its path. I remember quite vividly Prime Minister Papandreou’s appearance in Davos at the end of January 2010. I think he was surprised that international bankers were expressing concerns around the small, but now instrumental test case for the euro. His counterparts in Brussels, Frankfurt and Paris should have shared the same level of concerns as the Davos private sector elite.
Back then, interest rates on the Greek 10 year bond were close to five percent. Today they hover at just below 17 percent. What is shaping up to be a Greek tragedy is the level of long term debt that the country and its people will still be left with after all the reforms, taxes and spending cuts are done. Long term debt this year is expected to peak at 157 percent of gross domestic product. Finance officials in Athens say that number will dip to only 140 percent by 2015. That is tragic considering what the Greek people will go through.
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Black Queen Lara, you have visited Greece many times; what does such a title means?