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Crisis-Hit Greece 'Not Out Of Woods Yet'

Crisis-Hit Greece 'Not Out Of Woods Yet'

6:05pm 29th June 2011
(Updated 10:02am 30th June 2011)

European leaders who were crossing their fingers and hoping for a "yes" from Greek parliamentarians will permit themselves a small sigh of relief now the first hurdle has been passed.

Politicians approved a key austerity bill which paves the way for Greece to receive its next vital bailout loans that will prevent it from defaulting on its debts next month.

It came amid violent scenes in the capital Athens as anti-government demonstrators clashed with riot police.

The unpopular five-year package of spending cuts and tax hikes was backed by a majority of the 300-member parliament.

Nevertheless, no-one in the eurozone believes they are out of the woods just yet.

The key figures within the EU insist they have set a sustainable course for Greece to return to fiscal rectitude and to maintain its position as a reliable partner within the eurozone.

Nevertheless, many financial experts continue to doubt whether Greece will, in reality, be able to implement the proposed austerity measures.

A default is the scenario that is whispered about, but that senior politicians cannot afford to contemplate, at least in public.

There is an air of unreality that hangs over the debate about the implications of the Greek crisis for the eurozone.

This is because political leaders do not want to discuss the contingency operations that are being constructed behind the scenes should things not go to plan.

The danger that confronts the political classes is that a disconnect emerges between on the one hand their constant refrain that rigour, resolve and discipline can bring things to an adequate conclusion.

And on the other, the unpredictable and dangerous situation being played out on the streets and the financial markets.

The vote in the Greek parliament demonstrates that politicians are, for the time being, managing to hold the line.

But European leaders know that this is a long game, and no-one should draw too much comfort from an initial step in the right direction.

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