LUDMILA ANDRÉA

Greek Austerity

I’m sure that many of us have gotten used to hearing about Greece’s economic problems as well as the possible implications a the European Union will be faced with if these problems persist. I definitely have grown slightly indifferent to Greece’s woes. However, reading an article on the passing of a Greek austerity plan reminded me of the importance of these issues.

Greek parliament voted on an austerity plan last week after receiving an enormous amount of pressure from the country’s foreign lenders, who required action to be taken before providing the struggling government with more loans. Heavily dependent on foreign investments and loans in order to keep from defaulting on its debt, the Greek state is hanging by a thread.  The new austerity plan includes a 22% cut in the benchmark minimum wage and thousands of government layoffs before 2015. Although this plan may assuage lenders, it is bound to have extreme implications on a country whose unemployment is already dangerously high after years of recession.

Ultimately, although I think this is a necessary evil in order to keep its foreign investors on board, I don’t know if this is going to be a huge problem in terms of keeping the country from falling apart economically. It is obvious that the citizens are not happy, as can be easily judged by the more than 80,000 people who protested in Athens today. At such a tumultuous time, it’s difficult to know what the future of the Greek nation will be as well as the possible consequences that have the potential to shake the European Union.

For a long time Greece’s exit from the E.U. was pretty much unfathomable. However, recently a shift to a philosophy of ‘preparing for the worst’ has taken place, as the E.U. begins to take steps to minimize disaster if Greek ends up having to leave the E.U. To be honest I think that letting Greece leave the E.U. would be a pretty bad idea. Although the situation is pretty sticky, I think that everything that can possibly be done must be done because letting Greece go would not only give the wrong idea, but it also has the potential to set a hazardous precedent for other countries in the union who may face similar economic pressures in the future. For now it seems that the international community will just have to wait and see what happens and hope that the situation improves with minimal mishaps.