Nov 12 2012

Greece Debt Crisis Continues to Unravel, Offers Strong Lessons for the US

Feature Stories | Published 12 Nov 2012, 10:46 am | Comments Off on Greece Debt Crisis Continues to Unravel, Offers Strong Lessons for the US -

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Euro zone finance ministers, also known as the Eurogroup, met today in Brussels to decide whether they’ll approve a further 31.5 billion Euro loan to relieve Greece’s crippling debt. As of now they have not yet approved the loan even though the Greek Parliament passed an austerity budget late yesterday. The ministers are expected to sustain a freeze on loans to Greece until an agreement on how to make Greece’s debt sustainable is reached.

A senior EU official admitted that agreement on a debt solution plan for Greece will very likely occur only after a second round of discussions are concluded and approved of by national parliaments -notably Germany. The Greek Parliament has already passed two parts of the bill in the last two weeks amidst massive protests. Thursday saw nearly 100,000 Greeks gathered in central Athens to rally against the austerity bill, which also makes it easier for employers to hire and fire workers. Chaos erupted when some protestors attempted to break through a barricade and enter the assembly, triggering a response from riot police.

Meanwhile new reports of racist attacks against migrants in Greece are raising serious concerns. Nearly 90 cases of attacks have been registered since the beginning of the year but advocates feel the real number runs into the hundreds. The attacks have coincided with a sharp rise in popularity of Greece’s right wing party, Golden Dawn whose platform is based on rounding up and deporting immigrants and militarizing Greece’s borders.

Meanwhile here in the US, talk around a similar set of austerity measures has focused on avoiding a “fiscal cliff,” a colorful term for economic recession. Some claim the US will reach a fiscal cliff with the expiration of the Bush Tax Cuts this year and an activation of across-the-board spending cuts under the Budget Control Act of 2011.

On Friday, President Obama invited congressional leaders to the White House next week for talks on avoiding a fiscal cliff expressing that a compromise must include higher taxes on the wealthy. As an example of a possible compromise, Obama pointed to the deficit-reduction plan he released last year, which includes cuts to social security and Medicare.

GUEST: Yanis Varoufakis, political economist and author of The Global Minotaur: America, the True Causes of the Financial Crisis and the Future of the World Economy, a Professor at the University of Texas at Austin

visit Yanis’ website at

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