Main focus of Thursday, February 4, 2010

EU must fortify Greece

The EU Commission on Wednesday announced it would closely monitor the Greek budget owing to the country's deficit having reached 12.7 percent. Europe's press expresses concern about the stability of the euro and calls for tougher measures to be enforced against countries whose deficits grow too large.

Trouw - Netherlands

Greece's huge national debt has the same weakening effect on the euro as do the economic problems in Spain and Portugal. The only solution is more pressure from Brussels, writes the daily Trouw: "The Stability Pact is being trampled on as a result of the crisis all over the EU. But with a deficit of almost 13 percent, Greece is the worst culprit, and this has consequences for the monetary union as a whole. ... Greece plans to freeze salaries for public servants, increase taxes on fuel and improve its tax-collection system. In principle this is the right approach. Greece must solve its own problems. Brussels has said that it's not enough and points out that reforms to the pension system, the health-care system and the labour market are also necessary. Such compulsory regulations for getting the economy of a member state back on track are new. EU Commissioner [Joaquín] Almunia will also be looking over the Greek government's shoulder like a teacher. If this strategy is successful, it will be a good step towards an economic union." (04/02/2010)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Greece, » Europe

Dagens Nyheter - Sweden

The EU Commission should be stricter with member states, the Swedish daily Dagens Nyheter admonishes with reference to Greece's budgetary problems: "We need a series of reforms so that the Eurozone countries can avoid such problems in future. The monitoring role of the EU Commission needs to be strengthened. The relaxation of the Stability Pact brought about by the bigger states is unfortunate. Binding rules are needed to encourage the euro countries to accumulate a budgetary surplus in times of plenty. Sweden may not have introduced the euro as a means of payment but it is part of the EU and therefore dependent on effective cooperation." (04/02/2010)

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More from the press review on the subject » EU Policy, » Greece, » Sweden, » Europe

Eleftherotypia - Greece

Greek Prime Minister George Papandreou has announced new measures aimed at countering his country's budgetary crisis and fighting tax evasion. But the measures only expose the weaknesses of the socialist government, the left-liberal daily Eleftherotypia says: "In the end the government couldn't avoid drastic steps and couldn't fulfil the campaign promises of the Panhellenistic Socialist Movement (PASOK). ... By saying that the measures for big earners won't have the desired effect until 2011, the prime minister has revealed the major weakness of the state mechanism in the current fight against tax evasion. It is precisely this permanent weakness - which is also the main cause of the crisis - that is leading to the introduction of indirect taxes like the fuel tax. Is there any glimmer of hope that there are no further taxes to come that affect the majority of citizens and the weak instead of that minority which, as the prime minister himself put it, 'is lining its pocket at the expense of the majority'? This first shock gives us no cause for optimism." (03/02/2010)

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More from the press review on the subject » Domestic Policy, » Fiscal Policy, » Economic Policy, » Tax Policy, » Greece

Cinco Días - Spain

In the unlikely case that Greece goes bankrupt, Europe should have an alternate plan ready, insists the economics journal Cinco Días, especially in view of Lehman Brothers' failure: "How can one halt the Greek domino effect? An inability to pay is an unlikely scenario. The Greek government has itself resorted to tougher measures in order to prevent that, making cuts in the public sector and raising taxes on Thursday. And the European Union, which has partially accepted the Greek government's plan, would presumably assist where necessary. But observers said the same thing about Lehman Brothers. After this disaster the world should no longer take anything for granted. It is simply better to have a Plan B with many safety measures in place, in order to prevent the crisis from spreading, in case it is unclear how to handle Greece." (04/02/2010)

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More from the press review on the subject » EU Policy, » Fiscal Policy, » Financial Markets, » Banks, » Greece, » Europe, » U.S.

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