Why is Greece's national Debt projected to INCREASE even after Austerity measures?

Check this out: >> Greece’s economy has shrunk far more than experts originally expected last year, when the government needed a $140 billion rescue package to avoid bankruptcy. It shrank 4.5 percent last year, and is likely to contract by an additional 3 percent, according to Greece’s Central Bank. The national debt — now at about 140 percent of G.D.P. — is forecast to hit nearly 160 percent by 2012. << I thought the whole point of austerity was to dramatically reduce the debt burden. Why would it go up instead?

Asked By: - 5/12/2011
Best Answer - Chosen by Asker
First of all, the money that was given to Greece hes disappeared... Now the austerity measures are meant to make some money but really they destroy what was left from the Greek economy. You should know that extremely few big companies exist in Greece and therefore all the economy is based on small family businesses... More
Answered By: Leonidas - 5/12/2011
Additional Answers (5)
Greeks refuse to pay taxes, they refuse to declare income, the country is corrupt ... and if they continue this way, there is going to be a serious problem.
Answered By: Orla C - 5/12/2011
Fully agree with Orla C. Truer words have never been spoken. /// Edit: Just T/U young Vaz. She has an arguable point. Paradigm: Back in 1960, the German Government paid Greece 115m D-Marks in War Reparations. Over 100m went into the 'right pockets', and, the bereaved Greek Families ended up with alms.
Answered By: Richard Plantagenet - 5/12/2011
Οrla is not Greeks that refuse to pay taxes or declare income. You are wrong... More
Answered By: Vasiliki ♥ is in love ♥ - 5/12/2011
It's simple.The budget deficit decreased from 15% to 10%,but the GDP decreased too,the economy is "frozen".If it doesn't change,we can't get out of this vicious circle.
Answered By: Mesenor - 5/12/2011
This is because Mr Papandreou doesn't understand that when you increase taxes you also automatically reduce consumption, hence shops, restaurants and factories close down... More
Answered By: «Læge» - 5/13/2011
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