On this coming Thursday, the European Union 27 leaders will gather in Brussels for a summit dedicated to revive the European economy. While the summit was called by the new European president, Herman Van Rompuy, not much action has yet been seen or heard from his office. With the last financial developments in Greece, and the economies of Portugal, Ireland and Spain in peril, Mr Van Rompuy is going to have to move fast to avoid the danger to the Euro. The currency has been loosing value and several European countries are getting nervous to the point that there had been rumors about the possibility of Greece having to leave the Union. This is obviously just rumors as in the meantime steps have been taken to rein in the fiscal chaos in Greece. The European Economic and Monetary Affairs Commissioner Joaquin Almunia, whose primary goal is to stop Euro speculation on the financial markets, has outlined an austere fiscal regime that Greece will have to follow in the coming months. Included are budget cuts in all areas and progress reports to be sent to Brussels every few months.
The Greek Prime Minister Giorgios Papandreou has announced tough measures: cutting of salaries in the public sector by 4 to 6 percent; retirement age raised and raising the taxes on fuel, tobacco, and alcohol. The question now is whether the Greek population will go along with these measures or whether social unrest will become widespread. Strikes have already begun in the country.
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