We are hearing a lot about the disastrous state of the Greek economy. Why do you think that this has happened to Greece and how does forming part of the Eurozone help?

The economic crisis has taken its toll leaving many countries in deep financial turmoil. This actually started off in the Unites States as economic instability, ending up in real financial turmoil worldwide, resulting in the worst recession the world has seen in thirty years. We are told that there are signs of stabilisation, yet the conditions are still delicate. Our country has been hit by this recession but not as much as other member states; our economy was able to buffer the effect better.

You may be thinking - but what is the European Union doing about all this? Well, the EU has crafted a plan that aims to boost demand, which has quite obviously diminished in the recent months. It is also looking to save jobs and help restore confidence in the aftermath of the global credit crunch. Then there is also the Commission which is pushing governments to organize their responses in order to fuel demand and boost consumer confidence.

Coming to your question, as you pointed out, the Greek economy is in a disastrous state. The country has a budget deficit of more than 12% of its Gross Domestic Product, and debts that are expected to reach 290 billion euro this year. This debt is consequently costing them even more to service, and this has in turn hit the euro currency. According to traders, the euro slumped to the lowest point against the dollar since May due to the concerns over the Greek crisis. This has even prompted speculation over a bailout plan.

In response to EU pressure, Greece has committed to cut its deficit by four percentage points this year, seeing as it is four times the EU limit. Greece decided to target civil servants and the rich, by freezing pensions, cutting holiday allowances and raising luxury tax. This 4.8 billion euro austerity programme was designed to ensure they get help from Europe to address their debt burden. These measures have obviously not been met well in Greece, but the Prime Minister said this was essential to save the country.

Germany and the IMF have been regarded as crucial players on this issue. However, Angela Merkel ruled out financial help, although there are considerations to use one if it's German banks as a supporting medium. The IMF, on the other hand is busy advising the government on the best ways possible to address this delicate matter. The real problem fuelling the Greek crisis is more problematic than, say, Ireland’s is because it involves a weakness of the euro. It lacks the proper backing by a government policy.

However, there is a way out. The EU treaty looks to avert bailouts of member states, and with the right political will legal issues could also be overcome. However, the comments of most foreign Ministers were that the Socialist Greek Government needs to do much more and step up its operations to deal with this crisis, that may very well be affecting the rest of Europe. The aid from EU governments could come in many forms, from debt guarantees to creating bailout funds. One must wait and see the forms in which such aid may be presented, and it would be particularly interesting to see from which direction it comes, although the signs are pointing at the state run banks from Germany and France.

Other European nations are beginning to show signs of economic growth, but Spain persistently seems to remain stuck in recession. Results from the last part of 2009 are showing us that Spain is the only G-20 country not to have experienced expansion during this period. It seems like there is one common factor that cannot be ignored when talking about the countries experiencing the deepest recession - socialist leadership. And when mentioning socialist groups that seem to be taking the wrong direction, I cannot fail to mention the affiliation of the labour party in this week’s demonstration. Instead of helping the people in a time like this by showing solidarity to difficult government decisions, they marched people to the streets, two days in a row. A march that morphed effortlessly into a political expedition, with the end result of people hurling abuse at Nationalist MPs and even the Prime Minister. So much for these new progressive ways we have been hearing so much about.

www.davidcasa.eu