Greek economy was saved a year ago by a loan of 110 billion euros. Now, Athens comes back to ask for more. Jean-Claude Juncker, chairman of eurozone finance ministers, said last weekend that Greece needed a supplemental adjustment program.
What he actually wanted to say: Greece has not made the painful decisions necessary to convince markets that its intentions are serious in terms of public finances recovery. Rating agency Standard & Poor’s has just dropped the Greece rating by two notches Monday at a worrying level. With any new loan to Greece in the future, almost certainly, Great Britain’s contribution will be needed, even though it’s not part of the eurozone. It wouldn’t be the first time we have to endure unfair treatment because of the government decision to accept British participation in the mechanism of stability for the euro area.
We have already contributed with seven billion pounds (over eight billion euros) to rescue Ireland and we will probably give six billion pounds to Portugal. This amount exceeds the total savings that we made in the application program of budget cuts. There are fears that Spain is at risk of contagion, it might be the fourth country in the euro area economy. If it happens, the survival of the euro in its current form is hard to imagine.
During the weekend there were rumors – vehemently denied – according to which Greece is considering withdrawal from the eurozone to be able to recover. Greece fate will be eventually decided by Germany. Monday, Berlin announced that German exports in March reached a record level. However, German economic discipline is affected by Greece’s situation. When will German taxpayers decide that they have paid enough?