In the Wall Street Journal article from Saturday, May 14, “Greece to Miss Deficit Goal, Complicating Bailout Plans’, we learn that Greece’s budget deficit will decline only slightly in 2011 and barely at all in 2012, causing Germany a lot of soul-searching about what they are willing to do in providing more aid and keeping together their economic sphere.
It becomes clearer every day that Greece will need a new bailout plan to survive through 2012. Their budget deficit in 2011-2012 is 21.1 billion euros or 9.5% of their gross domestic product. The population is not taking the necessary course to make themselves eligible for private loans. For instance, they can’t improve tax collection. Right now Greek bonds are rated as junk. The EU and the IMF must bail them out.
What to do will be at the top of the agenda at the meeting of EU finance ministers this week.
Meeting in Brussels May 16, 2011