By Stanislava Pavľáková
Germany rejected a Greek plea for more time and prefers Greece to start cutting budgets by implementing the promised reforms. Greek Finance Minister Yannis Stournaras stated that the three-party coalition government failed to agree on the final form of the new austerity measures and wants a two-year extension to the 2014 deadline for it to cut its budget deficit to 2.1% of GDP from 9.3% in 2011. Such delay would, however, require up to €20 billion more in foreign funding. This request only highlights the seventeen euro zone nations’ growing impatience with its problem nations, and signals rough times for the monetary union.
Wolfgang Schaeuble, German Finance Minister, added: “Greece hasn’t tried enough so far, that has to be said quite clearly… no one on Earth who has followed this issue would think that Greece has fulfilled what it has promised.”
Before the coming week when the visit of the International Monetary Fund and EU will take place, the effective measures that could save 1€7.5 billion worth of Greek public finances from 2013 to 2014 ought to be identified. The decision must take place; there is no time to take a siesta. This agreement on budget cuts can also be understand as the first test of Prime Minister Antonis Samaras´s cabinet that took power a month ago.
The European Union is not close enough to solving its current difficulties in the long run. Only the long-term solution of the crisis itself can stabilize the financial markets and crank up the economy, because more months of a weakening euro including cumulative uncertainty will do more harm to the global economy.
With reference to Eurostat, within the euro zone itself the total unemployment rate reached 11.1% in May. In the “PIGS” economies, unemployment rates reached 24.6% in Spain, 10.1% in Italy, and 15.2% in Portugal. In the case of Greece, the statistics are available only for April and indicate the unemployment rate to be 22.5%.