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Former CBO Director Douglas Holtz-Eakin and University of Chicago Professor Charles Lipson on the need for further reforms to resolve Greece’s debt ...
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-- -- story today German Chancellor Angela Merkel arrived in Greece today.
And was met with the massive protests some Greeks even dressed as Nazis.
To mock the German leader -- it's so nice what a great welcome.
What the Greeks protest in one of the few people.
Who might actually be able to help them escape an economic meltdown joining me for more on.
Sorry university Chicago professor Charles -- and a former director of the Congressional Budget Office Douglas Holtz eat -- Thanks to both of you for joining us -- what -- those pictures.
Well I think this is a reminder that the Greeks really have not yet done not the harder forms that they need in order to be successful -- We know that to be successful in the bad growth big debt environment they have to cut government employment and it's -- transfer programs.
They've done very little -- that -- are supposed to cut 30000 jobs they cut a thousand they've lost another nine from attrition.
And any other entitlement -- really are too dramatic -- -- the retirement age at the 62 is sixty Germany's so.
Yeah -- Merkel there attend to remind them they'd they have a lot of work of Charles what do you think those pictures.
Well -- at the European equivalent of burning an American flag right near dressing up to at -- -- -- In order to insult the Germans.
You know it what Doug says is absolutely right about the how.
How much -- austerity still has to go.
In Greece but it's also worth remembering.
That over the last three years -- GDP has dropped dropped by 25%.
They have 25% unemployment.
Youth unemployment is 50% the got a big corruption scandal in the government.
This is -- really hard road to -- what Merkel is there to do.
He is in effect support -- existing government and say that she is backing them as they try to go through austerity measures.
Yeah -- -- she can be pushed I mean this is really biting the hand that feeds you.
Well you know I I find it you know a little ironic -- attacking the last friend on this.
Then -- release the Germans have committed to writing a check to save Greece and it's economically irrational it's in the interest of the the political environment which is greater Europe.
You know she's there to support the government she's there to remind them they do have some work through its it's -- support but.
This should be a little more welcoming of their last hope on this front Charles it makes me think the whole -- not gonna work out man.
Well there's a lot of political heavy lifting yet to do is worth reminding.
Everyone.
That -- recipients of these loans which come with a austerity measures are never very happy about it.
You do you see many Americans during during this political campaign welcoming the Chinese alone Snowe both parties are attacking in fact.
The the outside parties and last time in Greece and less time I was on Melissa you and I talked about.
The rise of a neo Nazi party golden dawn there's also movement on the far left there.
So everybody is trying to use this very tough situation in order to gain political lever.
Alternative I mean if they throw the Germans out and they say you know we don't wanna do this -- -- -- of the austerity eight brother on politicians out what does that mean it's hyperinflation economy collapses right or hurt it am I missing something.
Don't have it.
But they'll have to exit the Euro and the they won't have a monetary policy -- I don't believe their currency will -- worth -- -- they've got all the problems they've got already so.
You know they really need to do the restructuring because they will do it whether the Germans help them in.
Ought to have -- large land and Xena pulled that we'll be more or less painful for them at the Germans leave.
-- more painful there's no question.
-- Tennessee and so one only.
The -- doesn't want to know obviously you -- there'd there'd you know kicking them in the butt to get them out the door they're not leaving so obviously you don't want to meet analysts' let me ask you about this study -- -- -- -- delicately by the way.
The NB IMF put -- -- that he's saying that -- risk for serious global slowdown are alarmingly high.
There may not sit in part yeah -- -- from me talk about.
You know what if these are your friends you know take a look here enemies they're saying it's our -- because of the fiscal -- -- they're trying to blame a lot of problems on us.
-- what do you think that we deserve it.
In the fiscal that's a real threat but not I don't think we should fix -- -- the IMF happy we shouldn't picture as we don't need a recession I mean.
And and that's the number one priority even in fixing the fiscal cliff it would be self induced recession it wouldn't be good for any American.
The IMF has always complain -- the United States they were completed in 2000 they're complaining in the 1990s.
I think -- -- the ground assault.
Do you think -- progressive what's the last long before we -- -- -- -- the risk for a serious global slowdown are alarmingly high this is what they're saying this morning and -- that market.
Yes they said that there is essentially a one in six chance of -- look at our push back against the IMF BI MF says says something sort of mildly critical of the United States.
And we're pushing back imagine what it's like in Greece when they're telling you you've got -- and -- everything that's on the table so you can see just by our discussion how difficult the analytical issues generally going to love you so much about a jump we've got some breaking news thank you.
