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Greece's $6.5 billion Crisis Plan

Ihssane Loudiyi's picture

In order to fight the financial crisis, Greece will take new austerity measures ranging from cutting civil salaries to increasing consumer taxes. A summary of some of these key fiscal measures can be found here.

According to the Associated Press article, Prime Minister George Papandreou explained that the country must get back on its own feet with the help of the market and the EU: "Now, it is the time of Europe."

Greece will however turn to the International Monetary Fund (IMF) as a last resort if the cost of borrowing for the country is not brought down with the collaboration of European counterparts such as France and Germany.

Already high unemployment rates in Greece might further be affected by these measures that are also likely to cut back on consumer spending.


Submitted by Greg on
wish the Greeks the best to sort it out. however, the bigger issue of common currency in politically not integrated space is a big issue, particularly for ECA countries willing to adopt Euro.

Submitted by Hans Timmer on
If the problem can be solved by cutting @6.5 million, then small Greece must have suddenly shrunk a thousand times....But even $6.5 billion is surmountable in a global context.

Submitted by Anonymous on
Greece announced painful new austerity measures worth euro 4.8 billion. Without questioning the merit of these measures as a matter of economic policy choice, I just note that that amount could be doubled or tripled either with savings on interest rate on bonds issued at EU level (the spread between German and Greek bonds would lower with some kind of cross-guaranteed EU bonds) or with a financial transaction tax at EU level to be apportioned for Greece.

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