Greece just announced a raft of spending cuts aimed at reducing the nation’s budget deficit to 8.7% of GDP from 12.7%. It was met with praise from both European nations and ratings agencies.But Greece’s prime minister is pretty cool to think that his work is now suddenly done and that others are now obligated to do the rest:
“We have fulfilled to the utmost all that we must from our side; now it’s Europe’s turn,” Papandreou told his ministers yesterday, according to an e-mailed transcript. “It is a historic moment for the European Union.”
Too bad nobody else feels such urgency:
For now, none of the potential lenders has stepped up since a statement at a Feb. 11 EU summit promised “determined and coordinated action” to support Greece.
“There’s no need for such a thing at this point in time,” French Finance Minister Christine Lagarde said late yesterday on Sky television. “If it was required, the partners in the club would be available to restore stability.”
Merkel has even told Mr. Papandreou to basically take a hike, ahead of an upcoming Friday meeting:
“I expressly want to say that Friday isn’t about aid commitments, but about good relations between Germany and Greece,” Merkel said yesterday in an interview with N-TV, according to a transcript provided by her office. Greece’s steps are “an important signal” toward restoring confidence in the euro.
Thus it’s far from over for Mr. Papandreou, it remains to be seen if Greece can actually implement the spending cuts it has announced. Barring a sudden flash crisis, European nations will likely let this play out before committing actual financial support.
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