Saturday, 5 September 2009

Greece and Ireland weakening the Euro?

Greece can be currently summed up as a coutnry in economic, financial and political turmoil. The markets have reacted strongly to Karamanlis's decision to  go for October elections rather than a protracted campaigning struggle from now until March 2010. But the majority of economists would now admit that Greece is now sliding into recession. National debt is well over 103% of GDP and the European Union is casting a careful eye on what Greece is going to do in terms of fiscal readjustment. Indeed many now expect the two weakest EU countries, Greece and Ireland, to receive support from the EU coffers raather than default but this could well be at the expense of Germany and ultimately the strength of the Euro.
It is commonly accepted now in economic circles that the reforms carried out by New Democracy did not go far enough both in regard to the social insurance system and the education system. Ultimately New Democracy was forced to bow down when confronted with smouldering large- scale social unrest in the country which was fanned by high youth unemployment and general social  and political discontent and mistrust of the government. Coupled with this, leftist groups and anarchists in the country have resorted to terrorist violence to exploit the situation, the bombing outside the Athens Stock Exchange on Thursday of last week being the most recent example. Greece has hard times ahead.

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