At least for the moment,the Greek debt problem seems to be closer to resolution.German Chancellor Angela Merkel praised Greece for reigning in spending in a remarkably short time.If necessary,she said,they will defend their euro together.Dominique Struass-Kahn,Managing Director of the International Monetary Fund,believes the problem is unlikely to spread.Half of Greece's outlay had been for public sector wages and benefits.Big cuts to that spending have led to rioting,to which police responded with tear gas and batons.
Greek finance minister George Papaconstantinou said they took some difficult measures to show their determination.There is absolutely no question that they will meet this year's target.It's not just a Greek problem;it's a bigger problem.The unrest is normal and expected when they have such difficult reforms.It is encouraging that opinion polls are broadly supportive of the government.The biggest deficit they face is a credibility deficit,in Mr.Papaconstantinou's opinion.
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