On the Record

Greece Asks for More Time

Daniel V. Speckhard

Editor’s Note: In an interview with CTV News, Daniel Speckhard discusses how the Greek financial crisis is playing out in Europe.

Greece says it needs more time. It just can’t get its economic act in order, they’ve been five years now in a recession, so how long can the eurozone wait, or afford to wait, for Greece to act? At the same time, how long politically can the Greek government afford to stay in recession and have a country that’s looking at a quarter of its adults out of work?

Daniel Speckhard: I think they can afford to wait a little bit longer, because both sides still share an interest in not seeing Greece leave the eurozone. For the Europeans, they need to first be comfortable that a Greek exit would not fall over into further additional damage on the challenges they’re facing, particularly with Spain right now but also potential contagion into Italy. Until they’re confident that they have a solution to the challenges of Spain, they’re likely to talk tough, but they’re going to try to find ways to continue to drag out the discussions with the Greeks. And probably what they’re waiting for on the Spanish side is they’re looking for a way for the ECB [European Central Bank] to somehow strengthen a program to support a limit on the interest rates that countries will be facing, and you’ve seen some news recently about that. On the Greek side, the challenges there are Samaras having just been elected in June. He has to deliver something, so in response to the tough talk by the Germans that there is no more give, that’s not going to work politically for Greece. So they’re going to have to come up with some creative solutions to this, the bottom line being that probably there can’t be more direct money from Germany and the other European countries, but some other clever ways to find additional relief, either again working through the ECB or working through the IMF, so it’s indirect additional support to Greece.

Watch the full interview »