Main focus of Tuesday, March 2, 2010

EU ups pressure on Greece

EU Economic and Monetary Affairs Commissioner Olli Rehn on Monday urged Greece to do more to reduce its bloated budget deficit. Europe's help is badly needed but Greece must also show initiative of its own, writes the press.

Ta Nea - Greece

It will take more than just economising to emerge from the debt crisis, the daily Ta Nea writes, commenting that Greece must also bolster its economy: "The government must concentrate on two things. Firstly, we need a good and effective way of implementing the austerity measures. ... Merely announcing the measures is not enough. Let's not forget 2005, when value added tax was raised but state revenues failed to rise as a result. On the contrary, they fell! Now we face a similar danger because the state's control mechanisms are inoperative. ... Secondly, this country needs development prospects. It has been a long time since the government announced steps in this direction. It must now announce and implement measures for strengthening the real economy that will create jobs and raise the GDP. Failing that there will be no point looking for tax revenues because there will be no revenues that could be taxed." (01/03/2010)

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Il Sole 24 Ore - Italy

Greece should pay its debts on its own if Europe's unity is to be saved, writes the business paper Il Sole 24 Ore: "The dream of the euro has been shattered and attention is now focusing on a question that was raised on its introduction: is the euro a political union or just a 'currency board' [for imposing a fixed exchange rate]? ... Greece can leave the monetary union. ... If the recent financial crisis has taught us anything, it's that the implicit promises [of bailouts] made by governments are dangerous. They sow the seeds for future crises. ... If we want to save the idea of Europe we must dispense with these implicit assurances and instead strengthen the sense of responsibility of individual nation states by beginning to make the Greeks pay for their own mistakes." (02/03/2010)

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All available articles from » Luigi Zingales

Elsevier - Netherlands

The Greeks only have themselves to blame for the crisis, writes the right-wing liberal news magazine Elsevier. Yet it concludes that European aid for the country is inevitable and is also in the interest of other Eurozone countries: "If the financial markets lose trust in a single country it's not so bad for the rest. But if the loss of trust spreads like an oil stain, it will eventually push up the interest rates for a growing number of - if not all - government bonds issued by Eurozone countries. The growing concern about the euro will become a problem for European companies, even if initially they profit from the euro's low exchange rate. The Greeks, however, won't get off so lightly if help does come from other euro countries, because the financial supervision the European Commission exercises in the name of all the other European countries is drastic." (02/03/2010)

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More from the press review on the subject » Financial Markets, » Greece, » Europe
All available articles from » Paul de Hen

Neue Zürcher Zeitung - Switzerland

The idea that speculation with credit default swaps (CDSs) is responsible for Greece's financial crisis and the consequent pressure on the euro is nothing but a fantasy made up by politicians seeking scapegoats for the crisis, writes the daily Neue Zürcher Zeitung: "From this perspective the image of greedy financiers who intentionally bring about a national bankruptcy is absurd. Certainly, speculation can inflate CDS prices in the short term, which certainly doesn't help Greece. Nevertheless risk premiums for Greek bonds are primarily determined by their probability of failure. Speculation exacerbates the problem, but it is not the root of the problem." (02/03/2010)

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More from the press review on the subject » Financial Markets, » Greece
All available articles from » Claudia Aebersold Szalay

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