To stabilize its debt-to-GDP ratio, Greece would have to move from last year\u2019s primary deficit of 7.7% of GDP to around a 6% surplus. (A country\u2019s primary deficit is its government budget balance excluding interest payments.) That would involve huge cuts to government spending.<\/p>\n
So far, Greece appears unwilling to contemplate such drastic action. In fact, the Greek government is counting on a slight increase in wages and pensions for this year. As Boone and Johnson say, \u201cWhere is the austerity?\u201d
The two economists believe the financing package is intended to give European banks a chance to get out of Greek debt, before watching as the whole cycle repeats next year when the financing expires and the government in Athens will be forced to take harsh measures.<\/p>\n
Freelance business journalist Ian McGugan blogs for the Financial Post. <\/i><\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Don\u2019t count on a new aid package to solve Greece\u2019s financial woes. While the European Union appears to have cobbled together a short-term financing package for the debt-ridden country, the assistance looks more like an effort to buy time than to solve the country\u2019s fundamental problems, say Peter Boone of the London School of Economics […]<\/p>\n","protected":false},"author":4062,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-378592","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/378592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4062"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=378592"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/378592\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=378592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=378592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=378592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}