Governments in dilemma

In a bid to soothe worries, Trichet said on Thursday he was confident Greece could get its budget deficit under control. He also defended the viability of the eurozone, noting that the average budget deficit for the eurozone as a whole, at 6 percent of GDP, is well below the double-digit gaps in the United States and Japan.

On Wednesday, the European Commission endorsed Greece's plan to bring its budget deficit below 3 percent of GDP by 2012, saying it would closely monitor the implementation.

"Greece has adopted an ambitious program to correct its fiscal imbalances and to reform its economy," said EU Economic and Monetary Affairs Commissioner Joaquin Almunia, adding the commission "fully supports Greece in this difficult task."

For Greece and other heavily-indebted eurozone countries, there is a dilemma when governments take austere measures to cut deficits and public debts.

Usually, governments have to cut public spending and raise taxes to reduce deficits. As the economic recovery remains fragile, an early withdrawal of public spending may lead to a double dip.

In addition, those moves are often unpopular. When the unemployment rate is at a record high in Europe, people are dissatisfied with their governments. National leaders have to be aware that the efforts to rein in deficits carry political risks.

(Xinhua News Agency February 7, 2010)