Greece Could Default As Early As March If Further Cuts Aren't Made
January 5, 2012
The BBC reported late Wednesday that Greek Prime Minister Lucas Papademos says the country could default in March if the unions do not accept further salary reductions.
Citing an emailed transcript of statements to union and business leaders on Wednesday, Bloomberg is reporting that that Greek Prime Minister Papademos said that cuts in income are the only way to stay in the euro and secure international financing from the EU/IMF/ECB.
Prime Minister Papademos said that without an agreement from the unions, the latest bailout package and subsequent financing from the troika is at risk. As such, Greece faces the immediate risk of a disorderly default in March.
The Bloomberg article also noted that Yannis Panagopoulos, the head Greece’s biggest private sector union group, told NET TV that while he is willing to discuss how to reduce non-wage costs to protect jobs, the organization will not consider changes to national labor agreements such as cutting the minimum wage.
Recall that many analysts, including commodity expert Dennis Gartman, have predicted that Greece will ultimately default on its debts. “It’s what they do,” Gartman said in a CNBC interview last year when referring to the historical precedence of Greece defaulting on debt.
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