Financial crisis is not yet over

Certain government officials seem to be lost in a temporary state of satisfaction, believing that the government’s promises to clamp down on tax evasion and to rein in state expenditures have convinced Brussels and the international markets that Greece is on the right track. They really should wake up and smell the coffee, because both the European Commission and the markets are still expecting concrete measures that will be applied under a strict time-frame and with full supervision by European bodies. If the government does not come up with a much more specific agenda by mid-January, we can expect a very harsh reaction that will also have an adverse effect on the country’s borrowing. So the best thing the prime minister can do right now in order to restrict the damage looming on the horizon is to support his Finance Ministry by giving it the green light to go ahead with measures such as significantly curbing all allowances to public sector employees and freezing salaries that are above 2,000 euros.

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