Bloomberg View
● The Case Against a Cherished Tax Break
The Greek government on June 29 pushed through Parliament, by a vote of 155 to 138, the first phase of an austerity package needed to avert a default on billions of euros in government debt. Success, though, only postpones an unsavory choice that the euro area’s leaders will face sooner or later: Let Greece go and put both the European experiment and the global economy at risk, or forge a deeper union in the face of opposition from their voters.
Even if Greece gets its bailout and its economy rebounds, the government will have to run a budget surplus, excluding debt service costs, of 5 percent of gross domestic product for about three decades to bring down debt to the 60 percent maximum allowed by euro area rules. Achieving such a fiscal feat for even five years is extremely rare for any government, let alone Greece’s.