European leaders are so concerned about the economic situation in Italy, Ireland, Spain, Portugal and especially Greece, that they held an emergency meeting in Brussels yesterday , but can only come up with promises to help, because Greece has not made a formal request for aid. The euro is being battered and the "euro zone" is facing a crisis.
Highly indebted (used to be a term to describe the financial situations of under-developed countries, up their eyeballs in debt), countries(Portugal, Spain, Italy and Ireland), are wary of Greece's problems, fearing that it will spread to them. Pressure is being placed on Greece to implement a tough austerity program. This has resulted in widespread strikes, especially in the public sector, which is expected to bear the brunt of any cutback ( Greece is hundred of billions of euros in debt and has a budget deficit of about 13%of last year's G.D.P.. this is more than four times the EU limits). Greece has to accept EU limits if it is going to get help. At the same time THE EU cannot let the rot deepen and spread across the euro zone.
Mere message of "solidarity" is not enough as was seen in the response of the markets, which saw the euro falling yesterday, because there was no concrete package. The Greek government has agreed to cut its deficit by four percent this year, but high unemployment, loss of confidence in the economy and social unrest will make this very difficult. Portugal and Spain, as well as Ireland(the blush has worn off the economic bloom) and Italy (where Berlusconi is facing criminal investigation) are also highly indebted. They will have to be bailed out too.
The P.I.I.G.S. ( and this is not including the Eastern members like Poland and Hungary), and the entire EU ZONE are in for a tough time. Quick and concrete actions are needed, but there is only dithering.
Highly indebted (used to be a term to describe the financial situations of under-developed countries, up their eyeballs in debt), countries(Portugal, Spain, Italy and Ireland), are wary of Greece's problems, fearing that it will spread to them. Pressure is being placed on Greece to implement a tough austerity program. This has resulted in widespread strikes, especially in the public sector, which is expected to bear the brunt of any cutback ( Greece is hundred of billions of euros in debt and has a budget deficit of about 13%of last year's G.D.P.. this is more than four times the EU limits). Greece has to accept EU limits if it is going to get help. At the same time THE EU cannot let the rot deepen and spread across the euro zone.
Mere message of "solidarity" is not enough as was seen in the response of the markets, which saw the euro falling yesterday, because there was no concrete package. The Greek government has agreed to cut its deficit by four percent this year, but high unemployment, loss of confidence in the economy and social unrest will make this very difficult. Portugal and Spain, as well as Ireland(the blush has worn off the economic bloom) and Italy (where Berlusconi is facing criminal investigation) are also highly indebted. They will have to be bailed out too.
The P.I.I.G.S. ( and this is not including the Eastern members like Poland and Hungary), and the entire EU ZONE are in for a tough time. Quick and concrete actions are needed, but there is only dithering.
