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Wary Of Another Greek Bailout, EU Procrastinates
Originally published on Sat February 18, 2012 10:16 am
SCOTT SIMON, HOST:
The Greek economy continues to suffer. It's been another painful week for that country starting Sunday when thousands of people demonstrated outside of parliament, and rioters torched buildings in Athens. Greek lawmakers passed harsh new austerity measures despite those protests, and still, Greece's European partners refused to approve the new bailout that the Greeks need to avoid default. NPR's Eric Westervelt reports what EU finance ministers will be considering when they meet again on Monday.
UNIDENTIFIED WOMAN: (Greek spoken)
ERIC WESTERVELT, BYLINE: The tear gas and arson smoke left a bitter taste for Athenians and the sour taste got worse when Germany's finance minister Wolfgang Schaeuble railed that Greece had failed to fulfill promises to cut spending and raise revenue after it got its first bailout. Schaeuble called Greece a bottomless pit. The Dutch and others were also harsh. Schaeuble's comments sparked an angry rebuke from the normally low-profile Greek president. Eighty-two-year-old Karolos Papoulias lived under Nazi occupation during World War II.
PRESIDENT KAROLOS PAPOULIAS: (Greek spoken)
WESTERVELT: I don't accept Mr. Schaeuble disparaging my country. I do not accept it as a Greek, he said. Who is he to disparage Greece? Who are the Dutch? Who are the Finns, he said angrily. Despite the growing Greek resentment, European finance ministers insisted Greece cut more from its budget and sign political guarantees that austerity measures won't be watered down after elections in April. That's not all: EU officials want more outside fiscal oversight to ensure Greece follows through. There's now talk of delaying part of the bailout until after those elections and talk of setting up an escrow account to ensure Greece's creditors get paid first. To make matters worse, Greece is plunging deeper into recession. Gross domestic product dropped almost 7 percent in the last quarter. Unemployment is near 21 percent. The debt burden is growing. Jan Kees de Jager, the Netherland's finance minister, wonders if another multi -billion dollar bailout will even work.
JAN KEES DE JAGER: Whether the debt will be sustainable, that's one question mark we have. And the second, the implementation of all the measures because we have seen the track record in Greece, that they have derailed several times. Not once but several times.
WESTERVELT: De Jager joined European officials in publically downplaying the impact of a messy Greek default if it comes to that. De Jager stressed they still hope to avoid such a scenario. But he said the risk of a disaster is lower now given EU efforts to re-capitalize European banks and strengthen fiscal discipline. Eurozone ministers meet in Brussels Monday when Greece hopes they'll finalize the second bailout. Eric Westervelt, NPR News, Berlin. Transcript provided by NPR, Copyright NPR.