Markets also need convincing

If the Greek government wants to ever have a chance of borrowing at reasonable interest rates it needs first to convince the markets, as well as the rest of the members of the eurozone, that it is taking its obligations seriously and is determined to set the country on the right course. Interest rates will begin to drop once the world sees the government’s stability program being implemented in earnest, which means public spending must be curtailed and state revenues increased. It has become abundantly clear that no one is ready to step in and help Greece borrow at cheaper rates if Athens doesn’t first make good on its promises and get down to business. The only assurance Athens has received is that if it cannot find money on the capital markets, the European Union and the International Monetary Fund will help, but with loans that will have very severe terms attached to them. The important thing right now is for Greece to avoid reaching this point and for that to happen we need to see the government working hard and taking some tough decisions.

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