What's at stake in Greek confidence vote

Michael Steininger, CS Monitor, 21.06.2011

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It’s crunch time in Greek politics: This evening, parliamentarians in Athens will cast their ballot in a confidence vote for the Greek cabinet, reshuffled by Prime Minister George Papandreou last Friday. [...]

Meanwhile, inspectors from the European Central Bank and the IMF have arrived in Athens. Their task, officially termed as a “technical mission," is to make sure that the Greek government does not waver in its resolve to see the spending cuts through.

“If Papandreou survives the vote of confidence today – and I expect he will – it is most likely that a majority of lawmakers will follow him also next week in the vote on spending cuts,” says Janis Emmanouilidis, senior policy analyst at the Brussels-based think tank European Policy Center. “But that does not mean that Greece will have a stable government. Protests can turn into strikes and riots, we have seen that before.” [...]

The fear is that a bankruptcy of one member state could lead to a meltdown within the eurozone, where Ireland and Portugal are already receiving financial aid to keep the economy afloat and others, like Spain and Italy, are being watched with concern. But Greek voters, many of whom saw their wages drop by 15 percent while 400,000 lost their jobs last year alone, seem to prefer a default over yet more cuts and belt-tightening.

Many Greeks also feel that they have to suffer in order to protect the eurozone, says Mr. Emmanouilidis, the analyst.

“But still, Europe’s politicians aren’t just paranoid. The Greek crisis poses a systemic threat to the common currency. The last weeks and months have shown how fragile the system is, and there is a danger of a Lehman Brothers II with implications not just for Europe, but globally.”

For the entire article see here.


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