Organisation Communication

JP online 21.2.15

The crisis in Creece is temporary averted.

The Grecian coalition government and the euro bloc’s ministers of finance reached an agreement Friday evening that extends the current loan package to Greece with four months.

It is speculated whether Greece can handle the situation a few weeks or months without economic assistance, as the economy is in a bad state. Government finances do not add up, the Greeks have drawn billions of euros from the banks in fear of economic meltdown, and investors are fleeing the country in numbers.

“The Greek’s have lived beyond capability through a number of years of borrowed money where the balance of payments and government finances are in deficit. The country has had sizeable wage increases with fallen productivity, and corruption, evasion of taxes, and a inefficient tax system which has proven to be poison for the Grecian economy,” according to Jacob Graven senior economist in the Danish bank, Sydbank.

Also Helge J. Pedersen, who is Chief economist in Nordea, indicates that Creece have undertaking many years of excessive consumption. He refer to the country’s major financial worries as being “self-inflicted”, and believe, that the financial conditions of the country were so poor that it should not have been accepted into the Euro co-operation in 2011.

Chief economist Helge J. Pedersen thinks that “If the country is to be taken serious, the coming four month must be spend on introducing a plan for, how the collection of taxes can be brought up to a level, which match the government’s ambitions about being responsible for its own affairs, without further solidarity from other Euro countries. It is hard to imagine that Creece would be able to reduce its deficit to meet a sustainable level without other confessions from the country’s creditors”.