With Greek Prime Minister Antonis Samaras saying he has cast his lot with austerity, the magazine The Economist said evidence is growing that pay cuts, tax hikes, slashed pensions and firing workers alone won’t help the country meet goals imposed by the bailout program.
The magazine said German Finance Minister Wolfgang Schaeuble’s visit to Athens produced false optimism. He is considered the hardliner in the German government which has demanded the harsh measures in Greece.
The Economist said that no matter how many reforms Greece passes that it will not manage to achieve its fiscal targets.
“Once again a fragile Greek government has pushed delayed reforms through parliament at the behest of the European Union and the IMF even as angry protesters in the square outside demand its resignation. At stake was a desperately needed €6.8 billion slice of Greece’s bail-out. The vote on July 17th to cut 15,000 civil-service jobs and overhaul the tax system was close, mainly because Antonis Samaras, the centre-right prime minister, has seen his majority cut to just five seats after the small Democratic Left party pulled out of his three-party coalition”.
The Economist said despite what Samaras said there is no sign of a recovery. “IOBE, a think-tank, says GDP will shrink by as much as 5% this year, worse than its earlier forecast of 4.6%. Unemployment is expected to rise from 26.9% today to 30% next year.” “And privatisation receipts are disappointing: Greece will miss this year’s target by a wide margin,” the newspaper concluded.
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