Greek Debt Crisis: Why It Could Be A Good Thing For Europe

PARIS (Reuters) - Greece's debt crisis may end up helping Europe in the long run if it pressures governments to start addressing the potentially colossal costs of pensions and healthcare in coming decades.

Read the whole story: Reuters

Comments

[unbozo]

05:14 PM on 03/03/2010

yet another Cato propaganda fest. Be sure to put your hip boots on.

[Yank in France]

04:54 AM on 03/03/2010

After I posted the comment, below, I came across the following article, also from Reuters, which backs up my comment that Greece's debt costs are already shrinking.

"In another bright spot, Greece's borrowing costs fell to their lowest level in weeks as its government is expected to announce new austerity measures to win European debt guarantees for the cash-strapped European Union member."

http://www.reuters.com/article/idUSTRE62025220100302?feedType=nl&feedName=usbeforethebell

[Yank in France]

04:48 AM on 03/03/2010

Healthcare and pension reform?

Yes, these are two crucial issues for Europe but the fact is that govts will cut these areas LAST, not first.

In the meantime, the French are paring down on refunds for medicines deemed not particularly effective by the government-run healthcare system, which makes sense!

But the cuts are being made to PRESERVE the health and pension systems, not destroy them as certain free-market neurotics would like!

Just look around at the countries suffering the greatest from the crisis: The countries the LEAST social coverage are the ones who are SUFFERING THE MOST: the UK, Ireland, Spain and Greece.

As Greek PM Pandandreous recently pointed out in El Pais, the country needs to curtail massive corruption in Greek hospitals where equivalent operations can costs as much as 500% more than in Germany!

Greece's budget deficits stems from irresponsible spending and the country's easy access to funds available to all eurozone member-states.

The very fact that Europe has promised sufficient aid to Greece, "if need be", has reduced the likelihood that the country will need such aid, since the real threat facing Greece is not so much its debt but speculations, nourished by certain huge investors, of credit default.

Now that the market is assured that the country will not default, the interest rate spread between Germany and Greece has already started to narrow, meaning Greece is already paying less interest cost on its debt!