EconoMeter: Boot Greece out of the eurozone?
Issue is what's better for Greece, Europe and the world economy
Roger Showley, U-T SAN DIEGO
Sunday, July 29, 2012
Kelly Cunningham, National University System
Greece committed to a second bail-out just completed in February to cut spending and increase taxes in exchange for 100-billion-euro debt reduction, but is already not living up to the agreement. Europe is forced to come up with additional bailout funds as the IMF indicates they will not volunteer more funds. Greece must complete an acceptable budget-cutting plan to further reframe their solvency conditions. Default will cause greater widespread financial contagion prompting investors to question membership of other problem countries including Spain and Italy. Implications for the U.S. are stark to reduce spending before debt repayments also reach unsustainable levels.