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Is Europe’s Debt Crisis Over?

The worst of Greece’s financial crisis is over and other European nations won’t follow in its path, former European Commission President Romano Prodi says.
“I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”
Romano Prodi


“For Greece, the problem is completely over,” former E.U. Commission president and former prime minister of Italy, Romano  Prodi, says in an interview in Shanghai, Tuesday. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”
Greek officials have been working to reduce the nation’s budget deficit, which at 12.7 percent of gross domestic product was Europe’s largest in 2009.
The government last week announced spending cuts and tax increases totaling 4.8 billion euros ($6.5 billion), the third round of austerity measures this year.
French President Nicolas Sarkozy said on March 7 the 16- nation euro region must support Greece, which has more than 20 billion euros of debt falling due in April and May, or risk destroying the currency.
German Chancellor Angela Merkel, who runs Europe’s largest economy, has so far refused to give the green light to any aid package.
Intervention by European nations to date “was enough” and countries such as Spain and Portugal have “plenty of time” to get their finances in order, says Prodi, who in 1997 introduced a “euro tax” that helped Italy cut its budget deficit to 2.7 percent of GDP and so qualify to join the currency.

“Europe is more than happy,” Prodi says.
“For the benefit of the European economy, the decrease of the value has been absolutely positive.”