Wall Street Journal
June 30, 2011
The Greek parliament's backing of a bruising austerity package this week has cemented spending cuts and tax increases as Europe's main strategy for solving the country's massive debt problem. But a few policy makers now want to see a tactical shift: giving European money to Greece to blunt the damage that deficit cutting will inflict on the economy in the coming years.
The effort is driven by concern that years of recession, followed by years of weak economic growth, will undermine Greece's ability to pay its debts. Worse, a weak domestic economy could sow the seeds of more acute political unrest, possibly pushing Greek politicians to abandon the austerity plan they adopted this week in the years to come.
"The Greek debt problem is also a problem of too-low economic growth," Belgian Prime Minister Yves Leterme said in a statement Thursday. "After the positive vote in the Greek parliament, Europe should give hope to the Greek people."