Greek Government Fails to Reach New Austerity Agreement

Via the BBC:  Greece bailout: Coalition fails to agree cuts

Greek PM Lucas Papademos has failed to secure the support of his coalition for a raft of new austerity measures, after more than seven hours of talks.

[…]

A statement issued by the prime minister’s office said the aim of the meeting with the troika – representatives from the European Union, the European Central Bank and the International Monetary Fund – was to "conclude the agreement" before Thursday’s meeting of eurozone finance ministers.

This is all part of the ongoing Greek crisis and the ball is now moving to the EU level.

The proximate cause of the current attempts at action is a pending March 20th debt payment deadline.

More on the subject here:  Why Greece won’t go away.

FILED UNDER: Europe, Quick Takes, World Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Gustopher says:

    Contracting their way to growth, so they can pay their debt maintenance payments, just isn’t working. Austerity has been strangling the economies of everyone in Europe who has started down that path, creating a death spiral of lower revenues.

    The right answer for Greece is probably to default, and drop out of the Euro. If France and Germany want to bail out their banks that made the bad loans, that’s up to France and Germany, but I think we’re in the moral hazard territory.

  2. Hey Norm says:

    Latest is that they reached an agreement overnight.
    Good news I suppose. Although austerity in the midst of a economic slowdown is just stupid.
    I’m worrying less about the Eurozone recently…I guess hoping that everyone has seen any crisis coming and it is baked into the cake by now. Maybe it’s wishful thinking on my part…

  3. de stijl says:

    How exactly will austerity measures solve Greece’s economic problems or the EUs? I’m not saying there isn’t any slack in Greece’s economy, but is now the best time to address that problem?

    This whole “I’m going to shrink my way out of this demand problem” is kind of escaping me.

    If only there were some economists who had warned us against austerity at a time when the overall economy was contracting.

  4. Brummagem Joe says:

    I just read on the wire they’d reached an agreement. The problem here it’s rather hard to distinguish between Greek theater and reality. The only thing that worse for the Greeks than staying in the Euro is dropping out. The costs to the Greeks of exit are immense which makes me believe that in the end it’s most likely they’ll find some formula to stay in. This btw doesn’t preclude some sort of managed default which is essentially what’s being negotiated with their bondholders at present.

  5. JohnMcC says:

    Today’s NYTimes has the head of the Euro Central Bank saying that the Greeks did in fact reach an agreement. So I add my voice to those above updating this post. Apparently the ECB has a few economists who don’t buy the insane Austerity = Prosperity policy because they plan to keep their interest rate for inter-bank loans @ 1%.