OTHER VOICES

Euro rock and a hard place

Posted Sept. 29, 2011, at 6:03 p.m.

On the streets of Athens, Greeks protest against their government’s austerity plans. Their fears are understandable. The country already has 16 percent unemployment and the demands of the EU and the IMF are for 100,000 more public sector jobs to go, plus higher taxes and a massive sell-off of government assets before releasing the next tranche of their six billion euro bailout fund.

The Greek government is between a rock and a hard place. It desperately needs the funds to pay public sector wages at the end of the month. It has promised to put its house in order and cut its over-bloated public sector. But it has not delivered. After last year’s destructive riots in Athens which left the city looking like a war zone, it fears the consequences for public order if it do es so.

Despite the protests, the vast majority knows they are paying themselves far more than they earn, that they are the sick man of the euro zone and that the medicine, bitter though it is, has to be swallowed.

Greece will bite the bullet and go for austerity. It has no other practical option.

The crisis is not going to break the EU, over a third of whose members do not use the euro. Nor is it going to unravel the currency, despite the omens of doom from some financial analysts in the U.S. and UK (the latter almost gleeful at the prospect). While the world continues to buy into them, the euro will remain one of the world’s most powerful currencies.

Arab News, Riyadh, Saudi Arabia (Sept. 22)

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