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Greece Makes More Cuts To Secure Bailout Money

On Wednesday, Greek dropped the hammer on its public sector and started cutting costs left and right. It was a very extreme day, but that may be just what Greece needs.

There is no doubt that the Greek people won’t be happy with the changes that are being made, but then again, they don’t really have a choice – its either make cuts or fail.

To start, 30,000 civil servants will be effectively laid of, people who make less money will have to pay more taxes, high value pensions will be cut by 20 percent, and a controversial real estate tax that was passed on the condition that it was only temporary will be extended.

Based on all the changes that were made, Greece should be able to meet the requirements that will be set out by the bailout plan for the next few years.

We will see if it is effective in the long run – if it was this easy, what took them so long?

 

IMF Meetings Forthcoming – What Can We Expect?

The next round of IMF meetings will be starting soon and everyone is wondering what new developments will come out of them. They hope that some progress is actually made and that they set a positive direction for the near future.

It is obvious that the thing on everyone’s mind is the situation in Greece. It doesn’t take someone who is intellectually gifted to see that what they are doing is currently not working. There needs to be a change in the way they are approaching the situation, and it needs to happen very soon.

Some people are starting to argue that Greece should just be left to default and dig out of their problems in that way instead of dragging the issue on and causing more problems. Some intellectuals claim that no one in their right mind could expect Greece to ever pay back the debt it has taken on, so doing something like this would be the best option.

The problem with this, though, is that if Greece does default, it may draw in other countries in similar situations to do the same thing. If they do, the effect on the Euro zone and the world financial market as a whole will be catastrophic and cause more problems than it will solve.

In the end, we are just going to have to wait until the meetings are over to hear what is going to be done. We could make predictions, but that would be a futile task.

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