Greek strikes over austerity turn violent

Marketplace Staff Jun 15, 2011
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Greek strikes over austerity turn violent

Marketplace Staff Jun 15, 2011
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JEREMY HOBSON: Now let’s get to the protests going on in Greece. Richard DeKaser is an economist with the Parthenon Group. He’s with us live from Boston as he is every Wednesday. And Richard, Parthenon of course has nothing to do with the Parthenon that’s in Athens I guess. But it seems there are always protests going on over budget cuts in Athens. What’s different about today’s?

RICHARD DEKASER: Well, they’re bigger — more people — and they’re more violent. And I think what’s happening now is that the stakes are going up. People in Greece have already made very large sacrifices — pensions have but curtailed, retirement ages have been postponed, wages have been cut. And they need to do more in order to meet the so-called conditionality requirements of their creditors, namely the European Union and the IMF as well as the European Central Bank. More cuts are on the way, and that’s what people are taking to the streets about. They feel like they’ve had enough, but to get the funds flowing, they need to do more.

HOBSON: And connect that to what’s going on in Washington with the debt ceiling negotiations which are expected to lead to a deal that would involve big spending cuts. Is Greece a canary in the coal mine for us?

DEKASER: No, I think the analogy is very very limited. Greece really has a fixed problem. They’re running out of cash, they cannot go on unless they receive further credit from their creditors. The U.S. has ample reserves. Foreign investors have indicated every desire to buy our debt. Our problem is really self-inflicted and that is to say that the Congress hasn’t allowed us to, or may not allow us to, increase our indebtedness. So totally different situations, only remotely similar.

HOBSON: Richard DeKaser, economist at the Parthenon Group, thanks so much.

DEKASER: My pleasure, take care.

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