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European Debt Crisis

The inspectors call… on Greece

Stephen Beard Sep 5, 2012
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European Debt Crisis

The inspectors call… on Greece

Stephen Beard Sep 5, 2012
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Sarah Gardner: Greece will be hosting its least welcome visitors in Athens this week. Once again, the debt inspectors will be in town. Officials from the European Union and the International Monetary Fund will check out the government’s books to see whether the Greeks are complying with the terms of their second bailout. Word is: the inspectors will pile on the pressure and make the terms of that bailout even tougher.

From the Marketplace European Desk Stephen Beard reports.


Stephen Beard: This could be the last straw. The EU and the IMF are reported to be pressing Greece to further reform its labor laws and permit a six-day working week. In Athens, commentator John Psarapoulos says: in a country with more than 20 percent unemployed, that demand will be widely seen as insulting.

John Psarapoulos: That may produce a severe political backlash and the streets of Athens could become quite violent and ugly again very quickly.

And he says if these tougher terms are on the table, they will add to the sense in Greece that the country really isn’t wanted in the eurozone.

Psarapoulos: People no longer consider that Greece’s being thrown out of the euro is out of the question. I think it is now considered to be a political, economic and legal possibility.

In London’s financial center — in some quarters — a Greek exit or “Grexit” is considered a probability. Louise Cooper is a market analyst with the money brokers BCG.

Louise Cooper: The big question is: How quickly will the IMF and the European Union cut Greece loose?

But she admits the consequences of Grexit are unpredictable; it could lead to the unraveling of the euro. For that reason, Professor Ngaire Woods, an Oxford University economist, doesn’t believe it’s going to happen.

Ngaire Woods: No one can afford this to come to a head. The costs will be enormous for everyone in the European Union.

So she thinks the can will again be kicked further down the road. But after two and a half years of crisis, can the can take another kicking?

In London, I’m Stephen Beard for Marketplace.

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