Former Greek PM says austerity averted disaster
Speaking Downtown on Wednesday night, the former prime minister of Greece defended his austere measures that secured a bailout for his financially crippled country and averted “havoc” in Europe in 2009.
“Everyone thought Greece would be the tipping point for a global financial crisis,” George Papandreou said at Heinz Hall as part of the Pittsburgh Speakers Series presented by Robert Morris University.
Papandreou, who was born in St. Paul, Minn., and attended Amherst College in Massachusetts, served as prime minister from October 2009 to November 2011. Amid social unrest over high unemployment and severe government budget cuts, he resigned to allow the formation of a national unity government.
Greece, a member of the European Union, teetered on the brink of insolvency in 2010. To stem the crisis, the International Monetary Fund and European allies forged a $147 billion bailout. Terms of the loan called for the Greek government to raise taxes and adopt an austerity budget, which required furloughing 200,000 civil servants and slashing public pensions by 30 percent.
“But we succeeded in preventing a catastrophic default,” said Papandreou.
The country, however, is plagued by a lack of economic growth and an unemployment rate of about 28 percent.
The IMF is weighing another bailout package amid stiff resistance from other members of the European Union, especially Germany, which has contributed the most aid to Greece, said Marios Panayides, an expert on European economies.
“We aren't seeing any signs of Greece reversing those problems and growing the economy and creating jobs,” said Panayides, assistant professor of finance at the University of Pittsburgh. “And more and more young people are leaving Greece.”
Holders of Greek bonds are loath to forgive the debt, Panayides said, which further hampers Greece's ability to borrow money.
Some Greek leaders are considering pulling out of the EU, said Panayides. Such a move would raise concerns that other hobbled economies in the EU, especially Italy and Spain, might exit, too.
That would drive down the value of the euro, spook investors and dampen demand for U.S. exports to Europe, Panayides said.
Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Abercrombie name to shrink from clothing
- Auto market booming, but longer loan terms cause concern
- Banks’ earnings up 5.2% in 2Q
- Young adults drive home rental trend in Western Pennsylvania
- USDA updates dairy insurance program
- Twitch.tv online network reveals value of video gaming market
- Economy grew at brisk 4.2% rate in Q2
- JPMorgan boosts defenses against mounting cyberattacks
- Housing contracts rise as mortgage rates fall
- Government approves compromise on Corbett’s alternative Medicaid plan
- Ukraine conflict, disappointing earnings reports weigh on stocks