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European Debt Crisis

On the agenda at this week’s European summit

Stephen Beard Jan 30, 2012

Kai Ryssdal: Stop me if you’ve heard this one before, but there’s a big meeting in Brussels, Belgium, today about the European debt crisis. It came as Greek and German officials started getting testy with each other about how much Athens owes to whom, and who’s going to be in charge of fixing it.

We’ve got Marketplace’s Stephen Beard on the line from London for an update. Hello Stephen.

Stephen Beard: Hello Kai.

Ryssdal: So we’ll get to the nuts and bolts of this meeting that’s happening today in just a bit, but first: What is the latest with the Greeks and this — OK, I’ll say it — neverending saga of their debt crisis?

Beard: Well, doesn’t this tell you everything you need to know? We’re still talking about Greece, which started the whole crisis two years ago. The Greeks are seeking a second bailout; if they don’t get it by the middle of February, they could default. There’s a lot of problems with this — the Greeks say they cannot possibly fulfill the conditions which the rest of their eurozone partners have laid down. They can’t privatize all these assets, they can’t sell off Greek islands, they can’t sell other things because nobody wants to buy them in this climate. So we’re in a very fraught situation with the Germans getting exasperated and saying that if Greeks can’t control their own budget, we should send somebody in to do the job for them.

Ryssdal: Well that’s an important point actually, I mean, the Germans want control over Greek taxes and economy and budget — they want it to be outsourced, if you will; literally a European official in charge of it.

Beard: That’s right. And well, this has ruffled a few feathers in Athens. They see this as an issue of national sovereignty. The idea of having foreigners — let alone, Germans — in Brussels dictating budget policies to the Greeks, it’s causing a lot of anxiety and angst in Athens.

Ryssdal: To the meeting then today in Brussels, Stephen. This is, by my account, the 16th European debt crisis summit we’ve had.

Beard: That’s right.

Ryssdal: What can they possibly still be talking about?

Beard: Well, oddly enough, debt and deficit reduction is not top of the agenda. It’s growth and jobs. Since this crisis began, the Germans in particular have focused almost exclusively on debt, on cutting deficits, on cutting public spending. But today, economic growth and job creation has magically appeared at the top of the agenda.

Ryssdal: How does that happen, though, when the word of the day over there is ‘austerity’? How do you grow when you’re cutting?

Beard: Well indeed. I mean, how do you square that circle? Cynics say that actually, there hasn’t been any change of emphasis, that job creation and economic growth is not really top of the agenda. But they have to talk about it because unemployment in particular is more serious in the eurozone than it is in the U.S.; it’s more than 10 percent and rising across the eurozone as a whole. And youth unemployment in some countries is absolutely horrendous, around 50 percent of Greek and Spanish kids — that’s 18- to 24-year-olds — are unemployed. So this summit has to focus on jobs and growth, but the expectations, I should say, are not particularly high that they’re going to come up with any viable solutions.

Ryssdal: And there will be more meetings then on Greece and what the Germans want and all that? So it’s not over by a longshot, as we say?

Beard: Last year when we were talking, Kai, I predicted this whole thing would either blow up or resolve itself by the middle of October. Um, you poo-pooed the suggestion, as I recalled. You were right, so I think I better stay out of the prediction business.

Ryssdal: And yet we keep having you on the radio. Stephen Beard in London for us, thank you Stephen.

Beard: OK Kai.

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