Despite the Greek economy suffering over 20 % unemployment and 48% youth unemployment ,the European union negotiators have persuaded the Greek political leaders in the coalition government led by technocrats to accept further rollbacks including cuts in government spending amounting to 3 billion euros, reduction in the minimum wage by some 20 % and cuts in defense spending.
The only positive news in this announcement is that politicians were successful in exempting low income pensioners from cuts in their pensions. The fact that thereby for the time being Greece will be able to meet its bond payments because of further transfers from Europe is also perhaps positive news. There are many who might argue that defaulting on its debt and leaving the Euro and returning to the drachma might be a better outcome in the long run for Greece. The economy is now into its fifth straight year of deep recession and it is an absolute guarantee that the austerity being imposed in exchange for the bailout money will not solve Greece’s problems.