The special summit of heads of state in the Euro area on 21 July has yet again averted the imminent default of a member state. As usual, it was a last-minute deal that meets the country's financing needs against the promise of fiscal consolidation, structural reform and privatisations. But the epic struggle for an end to this crisis - which is still not over - has revealed that the political problem is profound. Member states took so long to subscribe to a European version of the IMF because they mistrust not only the government who receives the support but also the people. Ironically, the guarantors trust the Papandreou administration more than the Greek population when they see demonstrations against cuts in pensions or the abolishment of taxi licences.
Intereconomics Editorial, Volume 46, Issue 4, pp. 178-9
July/August 2011