US Media Spotlights Greece’s Dire Financial Situation

In case the Greek government and its private investors do not come to an agreement, the bailout plan for the Greek economy will fail and the next tranche will be lost, reports the US media, emphasizing the “harsh” warnings of Germany and France towards Greece to proceed with the implementation of all reforms agreed upon so far.

The severe threat facing the Greek economy is once again monopolizing the attention of most US media. Should the “high risk” negotiations between Greece and the group of bankers and financial institutions holding billions of dollars of Greek debt lead to no final agreement, then the bailout plan of the European leaders would most probably collapse, causing a serious blow to the common currency of the Eurozone.

Various reports are referring to the recent statements of Greek PM Lucas Papademos, who pointed out the necessity of further cuts in expenditures, since the risk of an irregular default is still threatening the country and its place in the Eurozone.

According to some US reports, this obsession over more expenditure cuts is actually deteriorating the situation in Greece, and last year’s problems, continuing in 2012, are bringing Greece, Italy, Spain and the European banks one step closer to the brink of default.

Despite the fact that many politicians and experts alike have asked Germany to implement a motivation policy in order to help the country face its deficit, the German government has asked its southern neighbors to pass further austerity measures, implement cuts on governmental expenditures, improve bureaucratic procedures, privatize state property and collect taxes.

At this point, the US media cites the opinion of Germany’s former Chancellor Gerhard Schmidt, who had proclaimed that any country facing problems such as Greece faces would only be able to weather the crisis with more investments in the field of infrastructure and employment, and less austerity.

In the meantime, renowned economist Oliver Blanchard of the IMF stated in his interview to CNBC broadcasting network that Greece requires a big haircut, so that the country gets to breathe from the three-year-long pressure. In addition, Greece needs to take a series of measures, such as salary adjustments, in order to boost economic growth. “Until then, the European partners must be ready to financially aid the country” concluded Mr. Blanchard.