In a vote of confidence on Tuesday, Greek Prime Minister George Papandreau was granted the opportunity to remain on as Prime Minister of the struggling nation. Greece, which was temporarily “saved” from unadulterated economic disaster by a sizable IMF-sponsored bailout which amounted to $157 billion. The dire economic straits in Greece has created ripples in Europe, as many European banks have a stake in the Greek economy (including but not limited to some of the biggest banks in France). In short, the Greek economy has become a toxic situation affecting other EU constituents, and, in turn, sending disrupting the stability of the global economy. According to CNN, the survival of Papndreau’s government, currently hanging on by a thread, provided a slight injection of confidence and market improvement in both Europe and the United States alike.
Greek PM George Papandreau narrowly survives, acquiring a vote of confidence on Tuesday that gives the Greek nation and foreign investors a brief moment of respite from the economic troubles in Greece.
Many are predicting a second round of bailouts for the small nation, but any further significant assistance from foreign lending entities will have to come with certain concessions from the Greek government. For one, Greece will have enact “austerity measures” to make up for the national deficit that has been irresponsibly accumulated, a point which includes the sale of government assets to raise money and contribute to pushing the debt back down. Additionally, general spending cuts will have to be made. Despite the perils involved, the situation comes down to very simple concept: Greece must spend less than they take in, much like a person attempting to lose weight must burn more calories than they consume. These aforementioned measures will have to be put into place before the Greek nation will see any resumption of foreign pecuniary assistance, as many investors have become gun-shy as the collapse of the Greek economy seems to only have been delayed by last year’s bailout funds.
Unfortunately for the Papandreau government, violent demonstrations have raged on as the increase in taxes and unemployment have fomented an intense dissatisfaction amongst the Greek populace. Protestors attacked the Finance Ministry, leading to a police crackdown via tear gas. Even if Papandreau does all the things necessary to beat back the deficit hanging around the Greek nation’s neck like an albatross, he could and likely still will be the bad guy in the eyes of his people. Sadly, for Greece and other nations facing deficit problems (including our very own), the only way to get back to normalcy–regardless of whomever caused the economic troubles in the first place–is to accept that sacrifices will have to be made and that things will get worse before they get better.
Contains information from CNNMoney.