Thursday, May 6, 2010

The Greek Drama unfolding-3

Due to the nastiness or you can say ugliness of what the Greek people will endure due to the proposed budget cuts and tax hikes and what the bailout money will carry with it the obvious penalties and pains, Greek Unions and people have come out on the streets and are waging violent protests against what they see as the failure of the government to not manage the government finances correctly. It is a sad story but I really don’t know how the increased taxes and budget cuts will raise the economy out of current problems. When the Greeks are not happy and all the violence shown around the world scares off potential investors and tourists, what other way there is to increase the revenues.

If Greeks fail to come out of the current problems then there is going to big trouble for other highly indebted European Countries, who will have high interest rates and limited access to international markets to raise funds for their economies or even like rolling over their debt with high interest rates.

Although Greece is a sovereign nation and will not run away with its debt obligations but still that is not how the international investors are seeing it now. This is a long term drama that will keep on unfolding in the coming years.

No comments:

Post a Comment