Sunday, December 13, 2009

Greece: Major Economic Problems for George Papandreou

This picture is from yesterday's New York Times and is by Aris Messinis of Agence France-Presse.

The Prime Minister of Greece is George Papandreou.

This past week, Greece's credit rating was downgraded (a report in yesterday's Times is here). There's a new Socialist government in power, and it sounds like the Greek people are really getting nervous about the state of their economy:
The dire economic situation has prompted the question of what went wrong in a country that was once seen as a model for European Union membership and that enjoyed 15 years of sustained growth, coming from behind to host the 2004 Summer Olympics. “We didn’t use the Olympic spirit well,” said Elias Clis, a former Greek ambassador. “The previous government took the safe way, and the safe way is a very dangerous path."

After winning by a wide margin in October, the Socialist government of Prime Minister George Papandreou announced that the country’s budget deficit was 12.7 percent of the gross domestic product, more than four times the 3 percent ceiling set by the European Monetary Union.

Mr. Papandreou last week estimated the national debt at $430 billion, calling it Greece’s worst crisis in three decades and blaming his conservative predecessors for the economic state.
388. Which European country is in the worst shape economically? It sounds like Germany is doing the best, and generally the eastern European countries (including Greece) are struggling most. How does Ireland's situation compare with Greece's?

389. Why do Greeks strike so much (the peg for the Times article is a recent trash-collectors strike)? I remember when I was in Athens there was a large-scale strike going on (I cannot remember which union), and Bart told me that strikes are just part of everyday life there. Do all Europeans love to strike, or is it really focused among the southern Europeans? Why does having a bigger social-safety net lead to more striking, rather than less?

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