"There’s a reason the EU settlement with Greece is taking two years to work out—–the necessary fiscal, monetary and economic measures are just too painful for both sides to bear. And the alternative is a disorderly default that would be even worse. Today’s outline of an agreement among the various Greek political parties to accept some harsh austerity measures has been presented to the EU, which is meeting in Brussels tonight. EU officials have already indicated that there will be no final approval today, and we think the negotiations may still drag on until close to the March 20th deadline for repayment of 14.5 Euros of coming due. Although a settlement by that time is more likely than not, the results will further weaken an already deteriorating European economy, and ensure slow growth for years to come. With the global economic growth slowing down as well, the fragile U.S. recovery is also in jeopardy.
The Greek governing coalition had an exceedingly difficult time coming to an agreement as they were pulled in a tug of war from two different sides. On the one hand they realized the necessity of getting the funds they needed to avoid default. On the other hand they are facing elections within two months and have to ensure that their successors would not renege on the agreement that is certain to enrage the majority of the population that has already undergone major government spending cuts, layoffs, wage decreases and tax hikes..."
at http://pragcap.com/why-the-2012-global-economy-will-disappoint-to-the-downside
The Greek governing coalition had an exceedingly difficult time coming to an agreement as they were pulled in a tug of war from two different sides. On the one hand they realized the necessity of getting the funds they needed to avoid default. On the other hand they are facing elections within two months and have to ensure that their successors would not renege on the agreement that is certain to enrage the majority of the population that has already undergone major government spending cuts, layoffs, wage decreases and tax hikes..."
at http://pragcap.com/why-the-2012-global-economy-will-disappoint-to-the-downside
