Very early on Wednesday, in Athens, Greece, George Papandreou, the state’s Prime Minister, and his cabinet remained in tact after a vote of confidence was held. Papandreou and his team have made it clear that they plan on enacting severe budget cuts for the sake of protecting government stability. Thus is why it is surprising that the administration was able to survive the vote of confidence as the majority of the nation is against the proposed budget cuts.
The economy of Greece has been hurting so bad that many of their lenders have drawn the line where it stands and are demanding that the Greek government make some changes and make them quickly. The number one demand of Greece is to cut spending drastically. One of the ways to do so is to fire numerous public employees. The Greek government is also expected to notably raise taxes and sell companies owned by the state in an effort to put together 50 billion euros (or 71 billion dollars) to try to get a bailout.
The hope is that Greece manages to pay back their lenders. If they end up being forced to default on their loans, the stability of the euro will spiral. As a result, the strength of the economy within the European Union would endure serious negative effects. And as a result of that, the world economy would take a downturn due to the fact that all of the economies of the world are connected either directly or indirectly.
Wednesday, the vote of confidence of the Papandreou administration passed by a close vote of 155 to 143. Now, the Greek government has to agree on tax raises, public layoffs, and other measures to improve the economy. The vote on what to do is expected to take place on June 30th.
The situation is do or die for Greece. According to Jose Manuel Barroso, the President of the European Commission, “There is no alternative to this program. Let’s face it. And that’s why it has to be clear. We need Greece to deliver and if Greece wants this program of support, Europe is ready to support it.”
However, if Greece does not deliver, it is the end of the line. Barroso made it very apparent that if Greece does not fix its problems, then the European Union and the International Monetary Fund would not be there to support Greece and help resurrect their economy.
The eyes of the citizens of Greece are on Papandreou and his team. There is no question that this is their last chance.