Argentina Star
[A] public poll in Greece has shown that the majority of Greeks will accept sharp austerity cuts to avert a bankruptcy of their debt-ridden economy.
The poll in the To Vima newspaper showed 55.2 per cent of respondents would accept austerity measures, 56.3 per cent would take wage cuts and 71.3 want squabbling Greek political parties to cooperate on raising the mandatory age of retirement and imposing a uniform retirement age of 65 for men and women.
By Pallavi Aiyar
Investors see Lehman shadow on bankrupt country.
Markets and investors remained nervous on Monday, despite the green signal from eurozone finance ministers for an historically unprecedented bailout of debt-ridden Greece to the tune of 110 billion euros. The euro dropped against the dollar in both Asian and European markets, continuing the currency’s five-month-long downward trend. Since a December high of above $1.50, the euro has fallen more than 12 per cent.
Analysts say that both long and short term concerns remain unaddressed by the much-delayed eurozone-International Monetary Fund (IMF) joint rescue package announced on Sunday. There are serious doubts being expressed over whether Athens can in fact sustain the austerity measures it has committed to in exchange for the aid.
Large-scale protests from unions and workers erupted in Greece over the weekend at the prospect of salary cuts, tax hikes and more stringent work conditions. Greece is aiming to bring its fiscal deficit down to the EU limit of 3 per cent of gross domestic product by 2014, from 13.6 per cent in 2009. Other long-term concerns relate to whether the bailout will be enough to avoid the spread of debt contagion to other bigger European economies like Spain and Ireland. The threat of a similar crisis in Portugal is already imminent.
By Simon Kennedy and Thomas R. Keene
April 29 (Bloomberg) — Harvard University Professor Martin Feldstein said Greece will eventually default on its bonds and other euro-area nations may follow, most probably Portugal.
“Greece is going to default despite all the talk, despite the liquidity package,” Feldstein, who warned almost two decades ago that the euro would prove an “economic liability,” said in an interview with Tom Keene on Bloomberg Radio today.
Greek officials are hammering out the terms of a three-year rescue package with European Union and International Monetary Fund officials that will probably give the country a loan of 45 billion euros ($59 billion) for 2010 alone. Greek bonds have plunged on concern about the country’s ability to pay its debt despite denials from officials that a default is in prospect.
Greece’s fiscal turmoil is now infecting other markets, with Standard & Poor’s this week downgrading Portugal and Spain, as well as Greece. Feldstein said other members of the 16-nation euro area may also default, with Portugal the main candidate.
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