Greek default not inevitable

European officials are denying rumors of an impending Greek default. Jean-Claude Juncker, Prime Minister of Luxembourg, said on Tuesday there was no suggestion that Greece will default on its debt or that Greece will leave the eurozone.

LONDON, ENGLAND (Catholic Online) - Greece's sovereign debt crisis has threatened the 17 member eurozone and some politicians and investors have suggested that Greece should be allowed to default, although in an orderly manner. Juncker denied that European leaders were considering this as a serious option.

In the latest meeting between the eurozone finance ministers, no agreement was reached on whether Greece should get the next installment of its bailout loans. They did however reach an agreement on a Finnish demand for collateral before it would agree to a second bailout for Greece.
Juncker said they plan to ask the Greek government to make further cuts in 2012 and 2013 as a condition of securing EU and IMF approval for the next round of bailout money. The Greek government has been asked to make these assurances prior to an October 13 meeting of these officials.

Greece has said that it does not need loans amounting to 8 billion in euros until November, effectively buying more time for a decision.

Despite the agreement between the finance ministers to request further measures by Greek officials, worldwide stock markets have reacted poorly. As the threat of a Greek default looms larger world markets continue to decline. Experts believe that if Greece defaults on its obligations, it could plunge the eurozone, and possibly the rest of the world, into another recession.

The finance ministers are having a difficult time with Greece. Last week Greece announced that they were not going to be able to keep their side of the bailout bargain by implementing deep cuts. Many experts warn this is a sign of dysfunction in the Greek government. The Greeks have promised to take further austerity measures to meet these goals in the future.

The austerity measures that have been imposed upon Greece in exchange for bailout money have been immensely unpopular in that country. Greeks are angry that unemployment is threatening to spike at 25 percent. The government has announced that it will suspend up to 28,000 public-sector employees by the end of 2011. The Greek government has also committed itself to reducing civil service jobs by 150,000 positions within four years

Greeks criticize these cuts saying that they are evidence of, "a program of social destruction in Greece."

Even in the best case, Greece's financial difficulties will likely persist for the next several years.

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