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European Debt Crisis

Greek PM: We’re on our way to economic recovery

Stephen Beard Mar 19, 2012

Stacey Vanek-Smith: We have spent a lot of time this year talking about the European debt crisis. The numbers aren’t all that different, but investors seem to be moving on. Worries about oil prices are taking center stage and Greece’s Prime Minister, Lucas Papademos says the country is well on it’s way to economic recovery.

Our London Bureau Chief Stephen Beard joins me live. Good Morning, Stephen.

Stephen Beard: Good morning, Stacey.

Vanek-Smith: Why this burst of optimism in Athens?

Beard: The prime minister of Greece has to sound upbeat about the Greek economy while keeping a straight face, but in an interview with the Financial Times, Mr. Papademos does sound perticularly confident.

He says now the country has secured a second bailout. The large majority of Greeks are knuckling down to the agreed budget cuts and economic reforms. And he says Greece is halfway along the path to recovery.

Vanek-Smith: Well, I’m guessing not everyone shares that optimism.

Beard: No indeed. Here’s one pessimist. Andrew Hilton of the CSFI thinktank says Greece is trapped in a downward spiral that will make it very difficult to pay off its debt

Andrew Hilton: Greece’s economy is still shrinking at about 5 percent a year. There’s no growth on the horizon, and we aren’t out of the woods yet. This isn’t the end of the crisis. In fact you could say really only the end of the beginning of the crisis.

Beard: And he’s not the only pessimist. The head of PIMCO, the giant bond investment fund, says the latest Greek bailout package will fall apart fairly quickly, and he says Portugal is going to need a second bailout too.

Vanek-Smith: Our European Bureau Chief Stephen Beard in London. Thank you Stephen.

Beard: Okay, Stacey.

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