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MBA specializing in International Business; traveled eleven countries; novice in four languages
  • Remarks From FT Article 11/28/2012 0 comments
    Dec 3, 2012 10:43 PM

    After reading the article in the Financial Times newspaper while in Europe, called "Greek debt deal buys time but offers no long-term fix" by Gavyn Davis, I had to think to myself that as Greece approaches another measure closer to taking up austerity that the latest budget aid received pushed for a budget consolidation, which Greece agreed to reach a primary budget surplus of 4.5% of their GDP by 2014. This goal to be reach is contradictory to the GDP forecast that indicated a dip as a result of the aid given to Athens since they reduced their payment on their co-financed development grants.

    I find this article to have great facts when it comes to real numbers but of course, this consolidation agreement only allows more time (2 yrs) for Greece to allocate resources and make cuts in order to honor their commitments. So far Greece has held up to an excellent standard by balancing tough decisions to meet a 9% cut to GDP, which leaves 6% more left to cut in the next four years.

    Facing Greece in the next step ahead is to acquire extremely low interest rates, as stated in the article, on their debt and allowing maturity in order to meet expectations and continue their structural reform without having to leave the euro. These issues are very important to the people in Greece but the faith has dwindled down as many feel that the money would be best left in their pocket, as one Greece resident made a point to me.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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