TAT ready to meet challenges

The Tourism Authority of Thailand (TAT) is preparing plans to deal with negative factors including the weak European economy, widespread local floods and the violence in the Deep South.

Europe is one of the most important markets for Thai tourism. The state agency is concerned mainly about a slowdown in arrivals from the United Kingdom, Iceland, Italy, Greece, Portugal and Spain. It expects some indirect but less severe impact on tourist numbers from Scandinavia, Germany and France.

“Many European countries still have potential to grow, including Russia, Poland and the Netherlands,” said Juthaporn Rerngronasa, the TAT’s deputy governor for international marketing.

“We have to keep existing key markets like the UK and Germany by promoting niche products such as medical, green and golf tourism.”

In the first eight months of 2011, Russian tourist arrivals to Thailand rose by 79% to 452,047 and are expected to reach one million by year-end. Medical and beauty tourism has potential to grow among Russian tourists.

“Russians prefer to visit South Korea for plastic surgery and weight reduction,” she said. “Therefore, we want to capture this segment and join with medical tourism operators such as Bangkok Hospital to promote medical and plastic surgery in Thailand. We’re also promoting honeymoon destinations.”

The TAT also plans to promote Thailand in North African countries including Tunisia, and Morocco.

The agency expects European tourist arrivals will increase to 5.12 million this year, from 4.45 million last year. In the first eight months, the figure grew by 19% to 3.8 million.

TAT governor Surapol Svetaseni said its crisis management centre was now monitoring the flooding situation, adding that key tourist sites had been affected in Ayutthaya, Uthai Thani, and Phichit.

But the recent car bomb explosion in Sungai Kolok district, which killed three Malaysians and one Thai and wounded at least 110, has shaken tourist confidence and 10 countries have issued travel warnings for the three border provinces of Narathiwat, Pattani and Yala. Eight other countries have issued travel advisories to their citizens travelling to the area.

Sansern Ngaorungsi, deputy governor for Asia and the South Pacific, said the TAT had held talks with tour operators and media to explain the situation in the Deep South, and that its impact on tourism should be short-lived.

The TAT is confident that the number of tourist arrivals from Asia will grow by 30% to 11 million this year. In the first eight months, the figure rose 35% to 6.9 million.


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Finland Falls out of Love With EU

Once a timid and compliant member of the European Union, Finland has become one of its most rebellious.

The Finns have made headlines recently by threatening to pull out of a rescue plan for debt-stricken Greece and blocking Romania and Bulgaria from joining Europe’s passport-free travel zone.

The Nordic nation’s dwindling enthusiasm for European integration challenges the cohesion of the 27-nation bloc as it struggles to tackle the debt crisis.

“Finland is stepping out of line. It’s very clearly a new phenomenon,” said Jan Sundberg, professor of political science at the University of Helsinki.

The country of 5 million on the EU’s northeastern border has traditionally been more pro-EU than Nordic neighbors Denmark and Sweden and is the only country in the region to have adopted the euro as its currency.

But Finland’s affection for Europe is waning, with a survey showing that satisfaction with the EU has dropped to 37 percent earlier this year from 42 percent in 2005. Finnish business and policy forum EVA interviewed 1,918 people for the poll in January and February. It had a margin of error of 1-2 percentage points.

In April elections, the euroskeptic and populist True Finns party — which has since changed its name to The Finns — made strong gains in April elections to become the country’s third largest political group.

“Finland is seen as a troublemaker now. It’s a looming, increasing lack of solidarity with the European project,” said Marlene Wind, head of European politics at Copenhagen University. “If this spreads we’ll have a huge problem getting Europe back on track.”

After the election, Europe watched Finland’s government formation talks with grave concern, fearing The Finns would be included and stop Finland’s participation in eurozone bailouts for Greece and Portugal.

Conservative Prime Minister Jyrki Katainen in the end formed a coalition government without The Finns, but with four others, including two euroskeptic parties.

In May, Parliament approved Finnish participation in the Portugal bailout on condition that Finland be granted guarantees, or collateral, for its share of any future eurozone loans.

Last month, Finland and Greece announced they had agreed on such guarantees for Finland’s share of the Greek bailout but leading eurozone members, including Germany, insisted the 17-member currency union would jointly decide the collateral issue.

They said talks would continue with all eurozone members until a joint solution was reached.

Katainen, who is staunchly pro-EU, worried the collateral issue would tarnish the country’s reputation.

“To be honest, this will leave a mark,” Katainen said in a radio interview earlier this month. “But I believe it will be temporary and small, if we find a solution to the guarantees that won’t upset the stability of the euro and damage other eurozone members.”

Nevertheless, he is adamant that Finland will not back down from its collateral demand, or it will opt out of the Greek aid package.

To some extent the shift in attitudes can be traced to Finland’s maturity and self-confidence as an independent nation. Through most of its history it’s been occupied by its neighbors — for 600 years by Sweden and between 1809 and 1917 by Russia, with which it shares an 800-mile (1,300-kilometer) border.


Finland falls out of love with EU

Once a timid and compliant member of the European Union, Finland has become one of its most rebellious.

The Finns have made headlines recently by threatening to pull out of a rescue plan for debt-stricken Greece and blocking Romania and Bulgaria from joining Europe’s passport-free travel zone.

The Nordic nation’s dwindling enthusiasm for European integration challenges the cohesion of the 27-nation bloc as it struggles to tackle the debt crisis.

“Finland is stepping out of line. It’s very clearly a new phenomenon,” said Jan Sundberg, professor of political science at the University of Helsinki.

The country of 5 million on the EU’s northeastern border has traditionally been more pro-EU than Nordic neighbors Denmark and Sweden and is the only country in the region to have adopted the euro as its currency.

But Finland’s affection for Europe is waning, with a survey showing that satisfaction with the EU has dropped to 37 percent earlier this year from 42 percent in 2005. Finnish business and policy forum EVA interviewed 1,918 people for the poll in January and February. It had a margin of error of 1-2 percentage points.

In April elections, the euroskeptic and populist True Finns party — which has since changed its name to The Finns — made strong gains in April elections to become the country’s third largest political group.

“Finland is seen as a troublemaker now. It’s a looming, increasing lack of solidarity with the European project,” said Marlene Wind, head of European politics at Copenhagen University. “If this spreads we’ll have a huge problem getting Europe back on track.”

After the election, Europe watched Finland’s government formation talks with grave concern, fearing The Finns would be included and stop Finland’s participation in eurozone bailouts for Greece and Portugal.

Conservative Prime Minister Jyrki Katainen in the end formed a coalition government without The Finns, but with four others, including two euroskeptic parties.

In May, Parliament approved Finnish participation in the Portugal bailout on condition that Finland be granted guarantees, or collateral, for its share of any future eurozone loans.

Last month, Finland and Greece announced they had agreed on such guarantees for Finland’s share of the Greek bailout but leading eurozone members, including Germany, insisted the 17-member currency union would jointly decide the collateral issue.

They said talks would continue with all eurozone members until a joint solution was reached.

Katainen, who is staunchly pro-EU, worried the collateral issue would tarnish the country’s reputation.

“To be honest, this will leave a mark,” Katainen said in a radio interview earlier this month. “But I believe it will be temporary and small, if we find a solution to the guarantees that won’t upset the stability of the euro and damage other eurozone members.”

Nevertheless, he is adamant that Finland will not back down from its collateral demand, or it will opt out of the Greek aid package.

To some extent the shift in attitudes can be traced to Finland’s maturity and self-confidence as an independent nation. Through most of its history it’s been occupied by its neighbors — for 600 years by Sweden and between 1809 and 1917 by Russia, with which it shares an 800-mile (1,300-kilometer) border.

It walked a precarious tightrope during the Cold War as a neutral country, submitting foreign policy decisions for Kremlin’s tacit approval in exchange for its independence.

When the Soviet Union collapsed, Finland jumped at the opportunity to cement ties with the West, joining the EU in 1995 after a referendum in which a clear majority — 57 percent — voted in favor of membership.

But the perceived threat from Russia gradually subsided, while Finland’s economy emerged as one of the most stable and well-off in the EU. With Greece and Portugal needing EU bailouts, Finland’s inferiority complex toward Europe has given way to a sense that it’s being forced to pay for the financial missteps of other countries, including Greece and Portugal.

This sentiment is spearheaded by The Finns party.

“It’s about time that we’re able to talk openly about issues that matter, and our Finns party has done just that,” said Toni Paussu, a 41-year-old tour operator who voted for The Finns. “At first we were labeled as swimming against the tide, but no longer. People listen to us now and others too have the courage to speak their mind.”

Last week Finland challenged the authority of Brussels once again, joining the Netherlands in blocking entry by the EU’s newest members, Romania and Bulgaria, to the borderless “Schengen” zone, saying they needed to do more to fight corruption and organized crime.

“We are not being difficult,” Katainen insisted. “Our aim is to make sure that countries that have problems … put them in order before they are accepted into the Schengen zone.”

Simon Tilford, from the London-based Center for European Reform, said he is baffled by Finland’s rebel stance on the collateral issue, but doesn’t believe that it will inspire many others to do the same.

“I think there is a risk of the smaller members, Slovakia and a couple of others maybe attempting that, but the diplomatic and political pressure not to do so will now be very, very fierce,” he said. “It’s very hard to imagine any of the key governments opting for that route. If it was the Netherlands or Germany or France it would bring the whole thing down overnight.”

Tilford said he expects Finland to be forced to a compromise because countries like Germany and the Netherlands “cannot afford for Finland to be allowed to be seen to free-ride on the back of their painfully wrought guarantees.”

Tilford says that Finland knew what it was getting into when it adopted the euro in 2002. “Finland has made its bed, it’s gotta lie in it,” he said.

(This version CORRECTS Corrects date in 17th paragraph to 1809. This story is part of AP’s general news and financial services.)


Sarkozy to Meet Merkel as Europe Weighs Enhanced Greek Help

October 01, 2011, 8:18 AM EDT

By Helene Fouquet

(Updates with comment on meeting in sixth paragraph. Click on EXT4 for more on Europe’s debt crisis.)

Oct. 1 (Bloomberg) — French President Nicolas Sarkozy said he’ll meet German Chancellor Angela Merkel in coming days as European officials begin debating a new round in their effort to prevent a Greek default.

There’s “no credible alternative” to channeling aid to Greece, Sarkozy said yesterday after meeting Greek Prime Minister George Papandreou in Paris.

His remarks signal the fight over an expansion of Europe’s bailout tool kit that will follow the enactment in coming weeks of the upgraded 440 billion-euro ($594 billion) European Financial Stability Facility. Euro finance chiefs will next week discuss accelerating enactment of a permanent rescue fund that provides more capital and a way of managing defaults.

“The failure of Greece would be the failure of all of Europe,” Sarkozy told reporters. “Remember in 2008, when the U.S. let Lehman Brothers fail, the global financial system paid the price. For both economic reasons and moral reasons, we can’t let Greece fail.”

Sarkozy said he will travel to Berlin to meet Merkel to discuss speeding the economic integration of the euro region.

Oct. 9 Meeting

The two leaders will meet on Oct. 9, said a person with knowledge of the plan, who declined to be identified because the date hasn’t been formally announced.

Steffen Seibert, Merkel’s chief spokesman, declined to comment on the date to Bloomberg News today, saying that the two leaders plan to meet before the next European Union Council summit in mid-October.

Greek bonds, debt of other bailed-out nations and European stocks gained this week on speculation that euro leaders were responding to international pressure to address the crisis, which began in Greece in late 2009.

Europeans haven’t responded “as effectively as they needed to,” President Barack Obama said during a roundtable discussion at the White House this week.

Papandreou said he committed to Sarkozy to carrying his promises to fix Greek finances and “change” the nation. As he traveled to Paris, civil servants and unions in Athens opposed to wage and pension cuts occupied government offices for a second day, blocking access for officials seeking to determine whether the country qualifies for an international loan to avert default.

Permanent Fund

European governments are moving toward enacting the permanent fund next year, a year sooner than planned, to replace the EFSF. Phasing in the permanent fund, known as the European Stability Mechanism, would provide a 500 billion-euro war chest. It also includes provisions for sharing costs with bondholders for countries with “unsustainable” debt.

Additional measures now in play include reopening the second Greek rescue agreed in July to increase the financial industry’s contribution and creating a safety net for Europe’s banks.

“The situation on the international financial markets is worrying,” German Finance Minister Wolfgang Schaeuble told lawmakers yesterday in Berlin. He said the EFSF upgrade is “urgent.”

–With assistance from Brian Parkin in Berlin. Editors: James Hertling, Jeffrey Donovan

To contact the reporter on this story: Helene Fouquet in Paris at [email protected]

To contact the editor responsible for this story: James Hertling at [email protected]


Travel program gives students chance to experience cultures

For many high school students, Athens is a place they’ll read about in history books and the Greek Isles are a picture on a postcard.

Penn-Trafford High School teacher Barb Koontz wants to change that. Since 1999, Koontz has planned summer trips around the world, giving high school students an affordable opportunity to travel abroad that they might not have otherwise.

“The kids can read all they want to in books and look at pictures, but to go there and experience it is a totally different thing,” she said. “They always heard about the leaning tower or the Aegean Sea but never thought they’d see it. A lot of kids will never get this experience again.”

Koontz planned her first trip after her students saw a travel brochure from Education First Tours on her desk and started discussing the lack of opportunities they had to travel.

Since then, she has taken groups of students and adults to Hawaii, Mexico and throughout Europe. The group — which has grown to about 40 people each year — travels with an education director provided by the travel agency. The approximately $3,500 price tag covers travel expenses and most meals for the 10-day trips.

The trips are intended to be fun and educational and to introduce students to cultures, sites and foods they otherwise might not get to experience. They stay in independent hotels rather than chains, tour sites and hold discussions with the education director about local sites.

Sometimes the group learns lessons that aren’t on the agenda.

During a trip to Paris in 2001, Koontz said, the group was walking back to their hotel and encountered a Pakistani protest against the French government.

“When they saw us, they had some things to say to us about George Bush, too, but there was no violence,” Koontz said. “It was certainly a new experience for a lot of the students.”

Political demonstrations were a daily event when the students visited Athens this summer, although, Koontz said, the travel agency kept them out of harm’s way.

Koontz said Athens — which she had visited about six years before — seemed like an entirely different city from the one she remembered. Political demonstrations were held daily, and the region had a 30-percent unemployment rate, Koontz said.

“I saw a huge difference in Athens,” she said. “I remembered being able to go out at night, and because of some unrest, we couldn’t do that (in 2011). “We talked a lot about how it used to be and why things had changed.”

The group didn’t encounter anything unexpected during July’s trip to Greece and the Greek Isles, Koontz said. She chose to include a cruise this year, which enabled students to experience the culture of many small communities in the Greek Isles.

“You’re able to see the tourist attractions but also the day-to-day life on the smaller islands,” Koontz said. “The kids could eat on their own, shop on their own. They could talk to local people.”

Senior Devan DeRiggi said she didn’t think she’d have the chance to travel abroad with a high school group. Although she has been to Italy and Mexico with her family, she didn’t expect to be able to take a group trip abroad until college.

“We had a lot of free time and a lot of options for places to see,” DeRiggi said. “It was better because you didn’t have to go for a whole semester or a whole year.”

Ashley Solo, also a senior, has traveled with her family but said she didn’t know of opportunities for high school students to travel abroad until she heard about the trips Koontz organizes.

“It gave us a good opportunity,” she said. “There aren’t a lot of other opportunities for us to do something this big right now.”

Koontz already is planning for next summer’s trip to the South Pacific.

“The kids are at a young age now, and who knows if some of them will even be able to do this later?” she said. “It’s hard to travel like this, but they have the opportunity now. Hopefully they can continue to go themselves later on.”


Greek sojourn inspires Michael Cinco collection

A year after his colleague Furne One drew raves for his Alexander McQueen-esque collection, it will be the turn of another Filipino designer based in the Middle East, Michael Cinco, to shine as he presents a 40-piece collection in the annual Philippine National Red Cross (PNRC) Fashion

Gala on October 16 at Makati Shangri-La’s Rizal Ballroom.

Inspired mainly by his recent travel to Greece, particularly Athens and the remote island of Santorini, the collection is a play on soft and hard, rigid and fluid elements.

“It can be anything, from the statues to the columns, as well as colors and barely seen details of elements I chanced upon during my travels,” said Cinco, who’s been based in Dubai since the late ’90s. “The sources are endless, to be honest.”

Cinco, who was attending to a client in neighboring Abu Dhabi, replied to our questions through e-mail. (He will fly home with his collection shortly before the event.)

Color as transition

“In my heart of hearts, I feel that I descended from some Greek god or goddess, which probably explains my fascination with Greece. It has been an endless source of inspiration for me,” he said.

Instead of grouping his pieces into suites, Cinco uses color as transition—from neutrals such as light gray to white and black, to bolder, more vibrant yellow, orange and red.

“It’s not about whether they’re short or long dresses,” he added. “I don’t want to make the usual and predictable day [dresses] and evening gowns.”

The show is all about giving Manila fashionistas an idea of how to wear, Cinco said, “my vision.” He also wants to give them the freedom to mix and match his pieces with clothes by other designers, depending on their mood.

The plan is to devote the first segment to daywear with short, flowing chiffon dresses, and men’s suits and jackets.

Beaded evening gowns will dominate the second segment; the final segment will be wedding gowns.

“I want people to see a more wearable collection,” he said. “For sure, there will be embellishments. I’m toying with the idea of using porcelain and black mirror.”

He’ll also use laser-cut ceramics, acrylic and mother-of-pearl shells on jackets and short dresses. Cinco will also unveil “out-of-this-world” prints—actually minute embroideries and sequins.

But the pressure, he admitted, is on. Cinco, who had the chance to show his range as a designer a few years ago in Philippine Fashion Week, acknowledges that this will be his biggest show in Manila.

“I’m excited and nervous at the same time, as I’m showing to a different audience,” he said. “I’m flattered as well because Tessa (Prieto-Valdes) and Kaye (Tinga) gave me the chance to showcase my collection to raise funds for a worthy endeavor.”

Fourth year

This is the fourth year Valdes and Tinga are co-chairing the event to raise P3 million for the benefit of PNRC Rizal Chapter and Assumption High School Class of ’81 Foundation.

Tickets are at P10,000 per seat. Tables are also available at P100,000 each for groups of 10. The show’s main presentor is Megaworld, with Audi, Etihad Airways and Smart Infinity.

Other sponsors are Sun Life Financial, HSBC, Pond’s, Resorts World Manila, Makati Shangri-La and Fila. (Organizers also wish to thank Jane Iredale, SMDC, Samsung and Canon.)

“I have been working on my collection for months now,” Cinco shared. “But welcome breaks such as my travels have helped me to evolve the concept. When I finally did my mood board, I coordinated with the director to discuss the concept in detail.”

This year’s show will be directed by Ariel Lozada and styled by Noel Manapat. Patrick Rosas and his team will do the models’ hair and makeup.

Comparisons between him and One are also in order. Cinco is ready for centerstage.

“I must say that Furne did an amazing collection last year,” he said. “Furne and I respect each other. I’m so happy for him that Filipino audiences accepted his work. I hope they do the same to me. After all, I’m also a Filipino who simply wants to take part in this worthy project.”

Cinco grew up in Samar with images of Hollywood goddesses Marlene Dietrich, Joan Crawford, Grace Kelly and Audrey Hepburn swimming in his head.

Their public personas, magnified a thousand times by their fabulous outfits, and his lush rural surroundings inspired him to go into fashion.

By 1988, Cinco was a fine-arts scholar. He took up fashion courses at Slim’s in 1991 before becoming a designer a year later doing hotel and office uniforms for a Japanese firm.

Encouraged by a friend to try his luck in Dubai, then a booming financial and cultural hub in the Middle East, Cinco made the big move in 1997. His first job proved to be daunting, as he was tasked to change the image of a big but slightly staid fashion house.

Word soon spread of how good he was, and before long, Dubai’s fashionable women were beating the path to his door.

Rather than sit on his laurels, Cinco left Dubai for a yearlong sabbatical in London and Paris to soak up the fashion scene and study special fashion courses at Central Saint Martins.

He went back to Dubai in 2003 to open his own couture house. As creative director of Michael Cinco Haute Couture, he caters mainly to women in need of elegant, one-of-a-kind wedding gowns and evening dresses.

Apart from being a regular at Dubai Fashion Week, Cinco has had the chance to show his pieces to international audiences during such events as Swarovski 7even and Miami Fashion Week.

His clothes have also been worn by celebrities, including British pop singer Lilly Allen and American socialite and recent Manila visitor Paris Hilton.

Most recently, Cinco’s “eco-couture” creations were featured in the latest season of “America’s Next Top Model,” impressing host Tyra Banks and judges Nigel Barker and Andre Leon Tally.

“I’ve been designing for more than 20 years now,” he said. “I can’t imagine doing anything else other than fashion.”

For inquiries and ticket reservations, call Maggie Gineta at 0917-8325570.



Sarkozy to meet Merkel after receiving assurances from Greece

The Irish Times – Saturday, October 1, 2011

RUADHÁN Mac CORMAIC in Paris

FRENCH PRESIDENT Nicolas Sarkozy will meet German chancellor Angela Merkel in the coming days after Paris received assurances from Greece that it will deliver on its commitments in return for European aid.

Speaking after a meeting with Greek prime minister George Papandreou in Paris yesterday, Mr Sarkozy said support for Athens was a “moral obligation” for Europe.

He said he would travel to Germany in the coming days to co-ordinate the next steps for the Franco-German axis that “has ensured the protection of Europe” during the debt crisis.

Mr Papandreou, Mr Sarkozy said, had assured him of the “total determination of the Greek government to scrupulously implement all commitments that Greece has given.

“The failure of Greece would be the failure of all of Europe,” Mr Sarkozy said. “Remember in 2008, when the US let Lehman Brothers fail, the global financial system paid the price. For both economic reasons and moral reasons, we can’t let Greece fail.” There was “no credible alternative” to rescuing Athens, he added.

Mr Sarkozy acknowledged how Greek people had suffered in the past few years but said it was imperative for Greece to fulfil the conditions needed for the release of its second bailout. “Reforms in Greece have been delayed for too long,” he said.

The Greek leader called the meeting “very constructive” and invited his European partners to send observers to verify first-hand his country’s commitment to meeting its economic reform goals. “I told President Sarkozy that any country which wants to can send experts to see what we are doing, [and] the sacrifices the Greek people are making to change their country,” he said.

Mr Papandreou was on a European tour, having met with Dr Merkel on Tuesday, to drum up support for Greece.

He has stressed the importance of the EU’s July 21st agreement, under which Greece was granted its second bailout, and insists Athens will meet its debt and deficit targets. Earlier this week, Mr Sarkozy said he would discuss details of a new Franco-German approach to solving the sovereign debt crisis following Germany’s parliamentary vote on Thursday that approved new powers for the euro zone’s €440 billion bailout fund.

The plan received fresh impetus from Austria, which became the 14th of 17 euro zone members to approve the funds, leaving Slovakia, Malta and the Netherlands as the only countries yet to approve it.

Despite several rounds of stringent austerity measures, doubts are still hanging over Greece’s ability to honour its debt payments on time and many analysts are now convinced that a partial default is inevitable.

France is one of the largest contributors to the rescue fund, while its banks are heavily exposed to sovereign debt from Greece, Italy and Spain.

Worries about that exposure has led to a steep decline in the share prices of the country’s major banks this year, though the government insists the institutions would be positioned to cope with any Greek default.


Greece: This cannot end well

Taxi drivers protest outside the Greek Parliament in the center of Athens as the government struggles to cut spending and raise taxes.

Taxi drivers protest outside the Greek Parliament in the center of Athens as the government struggles to cut spending and raise taxes.

NEW YORK (CNNMoney) — The debt crisis in Greece cannot end well.

That seems to be the general consensus among investors, economists and academics.

Even though global financial markets showed some resilience this week, the tone remains cautious as the underlying problems haven’t changed.

“There is no way to avoid pain for Greece,” said Holger Schmieding, chief economist at Berenberg Bank. “The austerity is painful. Further painful structural reforms are on their way.”

There are essentially two options: Greece can continue to cut spending and raise taxes in a painful attempt to convince creditors that it can change its ways. Or, the country can admit defeat, default on its debts, and hope for the best.

Euro area leaders have said repeatedly that a default is off the table, arguing that such an outcome would have severe and unknowable consequences for the euro currency and the global financial system.

Euro crisis: 5 things you need to know

But there is also a growing recognition that the status quo is not working.

Over the past 15 months, the Greek government has cut wages for civil servants, raised taxes, reduced pension payments and furloughed thousands of workers.

In exchange, Greece has received billions of euros in emergency funding from the International Monetary Fund and other countries in the euro currency zone.

While the bailout money has kept a default at bay, many economists say the requisite austerity has pushed the Greek economy deeper into recession.

That’s a problem because Greece will not be able to pay off its debts organically until its economy starts to grow again, something economists don’t expect to happen for some time.

In many cases, Greece has delayed carrying the most painful reforms and critics say the government remains bloated and inefficient.

Yet the recent belt tightening has led to renewed strikes and protests in Athens, raising concerns that more austerity may be politically untenable for Greece.

At the same time, there is growing opposition in northern Europe to providing open-ended support for Greece. The worry among taxpayers in Germany, Finland and Austria is that the bailouts will never end.

All of this has culminated in a tense showdown between Greece and its benefactors at the IMF, European Commission and European Central Bank, known as the troika.

Euro stability fund is a mirage

Greece needs its latest installment of bailout money soon or it will run out of money by the middle of October. But the troika is not expected to make a decision until Oct. 13, according to German finance minister Wolfgang Schauble.

Hans-Joachim Voth, a professor of economic history at the Universitat Pompeu Fabra in Barcelona, described the negotiations as a game of chicken, in which both sides are seeking to save face and buy time.

“Greece will probably get the next €8 billion tranche, but I think that will be the last one,” he said.

Voth, like many economists, expects Greece to eventually default on its debts.

In theory, an organized default would allow Greece to get out of debt and take steps to boost its economic competitiveness.

Yes, a default would wipe out Greek banks and violate some European Union treaties. But it’s better to “pull the plug” and move on than continue to delay the inevitable, they say.

“Restructuring is always a painful process and, even in the most positive scenario, it will be painful for Greece and cost other eurozone countries money,” said Natascha Gewaltig, director of European economics for Action Economics in London. “But there is no alternative.”

Gewaltig said there is a 50% chance that euro area authorities will manage a default in an organized way.

Then again, others warn a default could shock the global financial system at a time when economic activity around the world is slowing down.

Euro supporters say even a structured default by Greece could hit banks across Europe and drive up borrowing costs for other debt-stricken nations. The so-called contagion would be difficult to contain and could lead to a break up of the euro currency union.

“The best possible outcome for Greece is to stay the course, stay in the eurozone and return to growth when the structural reforms start to work and the austerity eases,” said Schmieding.

Europe’s debt crisis: Complete coverage

“Whether or not that includes an orderly restructuring of Greek debt makes only a very modest difference for Greece,” he added. “One way or another, Greece will depend on foreign help — and thus will have to meet conditions to qualify for such help.”

In any event, the crisis has revealed fundamental flaws in the way the euro area operates.

Critics say having a shared currency without a coordinated approach to managing government debt was a bad idea to begin with. Others say allowing Greece, Portugal and other southern European nations into the club was a mistake.

The larger question, many analysts say, is will the 12 year old currency union be able to survive the crisis in its current form?

If Greece defaults, will it be forced out of the union? Will that drag down Italy and Spain? Could Germany abandon the euro out of frustration?

The answers to these questions may come in the next few months. For now, most experts agree that it’s difficult to see a happy ending for Greece. To top of page