THE markets are certainly convinced that a Greek exit from the euro zone will be avoided, judging by the reaction of equity investors yesterday and today. Game theorists will doubtless debate for years whether the tactics of the Syriza party were designed for an external audience - forcing creditors to give way - or for an internal audience - convincing voters they had done everything possible to secure good terms.
The final package is heavy on tax increases, which of course count as austerity just as much as spending cuts. However, Syriza can present it as the rich, rather than the poor, paying the bill. Jacob Kirkegaard of the Peterson Institute points out that creditors
will find it hard to accept an offer from a government notorious for failing to collect taxes to essentially solve the problem with a tax hike
But this is just the kind of last-minute fudge in which the EU specialises.
The trickier bit is dealing with the expectations of the Greek electorate. Greek newspaper headlines include
8 billion cuts and they want...Continue reading
from Economics http://ift.tt/1LraGRA
via IFTTT
No comments:
Post a Comment