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With Greece Bailout Comes Relief, Lingering Doubts

February 21, 2012 at 12:00 AM EST
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JEFFREY BROWN: And we turn once again to Europe, struggling to avoid even worse damage from its debt crisis.

A major step was taken this morning in Brussels, where Eurozone finance ministers announced a $172 billion bailout for Greece, the second bailout package for that nation aimed at helping it avoid default.

We begin with a report narrated by Richard Edgar of Independent Television News.

RICHARD EDGAR: Today, the Greek finance minister returned home with the news. Today’s decision in Brussels, he says, in regards to the political, economic and social consequences, is perhaps the most important of the post-war era.

EVANGELOS VENIZELOS, Greek finance minister (through translator): We avoided the nightmare scenario yesterday — or today in the morning, rather. We had a positive outcome, which, as I said in Brussels, was neither easy nor obvious.

RICHARD EDGAR: The aim is for Greek debt to fall to just over 120 percent of the country’s GDP, a measure the size of its economy, in eight years’ time.

But the European Commission’s own research which emerged last night says the plan is accident prone and debt could swell dramatically, only falling back to today’s levels in 2020, despite the bailout. It’s concentrating minds elsewhere in Europe that this might not yet be over.

Here in the U.K., meeting the Spanish prime minister, David Cameron calls for financial protection.

DAVID CAMERON, British prime minister: What I would say is that Greece has made its choice. And we now have to focus on the next step, which is constructing a firewall that is large enough to prevent contagion within the Eurozone.

RICHARD EDGAR: And Spain may need that firewall. Markets are turning their attention to other countries in the Eurozone.

BILL BLAIN, market analyst: What we think could be the next stage is that the market refocuses on how Italy and Spain in particular restore their economic growth. So it may be over the next couple of weeks that we see a renewed crisis in the rest of Europe.

RICHARD EDGAR: On the streets of Athens, the reality of their situation is sinking in.

WOMAN: I believe that Greece won’t bear this burden.

WOMAN: I have two children, and I’m just scared for them. They most probably want to go abroad and live abroad.

RICHARD EDGAR: The full consequences of this rescue are still to be felt. This is the first act of the Greek tragedy, not the last.