The Greek program specifies a credible and significant fiscal consolidation effort with a long-term impact, which warrants EU assistance, Bajnai claimed, openly embracing the pro-support argument in the "Shall we provide financial support to Greece?" dilemma which has been a concern for many in recent weeks. The premier reminded that Hungary ended up in a similar "financial vacuum" and required "artificial resuscitation" by the International Monetary Fund, however recently implemented measures of economic policy have helped restore faith in the country.

"We come from where you are going," Bajnai summed up the Greek situation, meaning Greece is now expected to adopt similar measures of fiscal consolidation to the ones Hungary was required to perform. The two situations are highly similar: procrastination in economic policymaking left bother countried highly exposed to the impact of the global crisis, as a result both governments are now forced to carry out structural reform and radical fiscal consolidation simultaneously, require international assistance and exposed to significant pressure in financial markets, Bajnai said. He believes Hungary has performed the task of fiscal consolidation successfully, Hungary has emerged with the 5th lowest deficit-to-GDP ratio in the EU, a 15% stronger national currency, and the base rate at a historic low.

This success story required a schedule heavy on major adjustments in the initial phase, and a critical mass of changes had to be implemented to restore credibility, in addition to targets which are measurable, audited (and reviewed by the IMF each quarter year), Bajnai said, expressing a view that Europe will soon have to enter a similar path of deficit cutting and structural reform.

Rather than discussing the challenges Greece is facing, Papandreou was talking about the things the global crisis taught the world. He said the key issues of democracy were how the present generation is able to create a sustainable and habitable environment for generations to come, as the contingencies and morals of the crisis have taught us. On the subject of financial assistance, he said Greece was not asking for funds to save the country, instead it was requesting support toward this program."

Source: Portfolio Online Financial Journal