One of the critical challenges ahead of global economic recovery is sovereign debt that during good times many nations borrowed from the market or pumped in after the start of financial crisis. Since the very start of crisis, experts and politicians have been sharply divided on ‘how to deal’ with the problem. On the one hand, many have maintained that accumulation of sovereign debt may not pose severe danger and government should spend largely in order to pull the economy back on the track.

On the other hand, many recognize curbing the public expenditure through austerity measures the best way for economic restoration. All countries have applied austerity measures to some extent. But the measure differs to severity and broadness. In some countries, economic austerities are introduced in particular sectors but are light enough not to fuel general opposition or civil uprising. While in some the measures are harsh and tough that people cannot accept and oppose them through demonstrations and protests. See, for example, Spain, Portugal and Greece where protestors decorated streets by their posters and placards asking for resignation or expressing their stance towards austerity measures.

The series of protests have already cost too much. Both Greece’s and Italy’s heads of the states resigned, and recently Romanian prime minister joined them too, over mounting oppositions to economic belt-tightening steps introduced in the country in order to bring budget deficit under the control.

Those resignations could not open the knot. Rather the situation became far complicated about how to deal with rising civil unrest over high unemployment rate, austerity measures and etc. There seems least cooperation from mass of the people as they point finger towards financial institutions, governments, and many other organization and institutions.

In Greece, the leaders of the three parties in coalition government signed off on new tough austerity measures, including a controversial reduction in the minimum wage, in exchange for about $171 billion loans from the Euro members and international financial institutions.

As I noticed that former Greece Prime Minister resigned over the same reason behind for yielding to conditions of donors over receiving loans. In Greece the people, till the final day of signing for further austerity measure by the government, were holding protests to ban the deal.

So, what was the choice ahead of Greece politicians?
Austerity measure is supposed to bring down debt level in troubled economies to a convenient level, but it has worked yet in reverse. The debt level has not come down rather it has increased due to protests and demonstrations, some which of cost governments millions of dollars.

In addition, austerity weakened the consuming capacity and rising taxes have led to forced lay-offs which have brought about high unemployment rate.
After receiving bailout money, the private creditors too followed the step and exchanged their holdings of government bonds. Though Athens officials made quite interesting and drew promising picture about the economic prospective, many still maintain it is too early to celebrate the deaths of global economic slump.

So, years of continuous economic slumps motivated many to claim for fundamental change or even the end of current economic system.
Presently, there are deeper questions about the ruling economic system: whether the system is sustainable and working out with small technical fixation? There are Leftists gaggling nowadays more than ever while hearing voices calling for economic regulation and restraining the presently unbridled Capitalism which has led to growing gap and creation of economic classes. Though economic classes have been always out there in the history with shadowy borderline, the situation is getting severe and serious as the gap has become so wide that no kind of political measure have been able to bridge it.

So, there are needs of much bolder and fundamental steps to solve the challenge. What kind of the measures must be held?
No doubt, 2008 financial crisis was not the only recession; however, it was the biggest. But all economic crisis and stagnation was ultimately ended by governments’ interventions during past decades. But it is the first time, after the biggest economic crisis of 1930’s that governments’ interventions have been unable to solve the problem and bring the confidence back to global markets entirely. Instead, this time a new scenario came to dominate the market. That was exactly when governments started injecting cash into the global markets to restore their confidence.

Before the eruption of the crisis and collapse of the global market, many countries around the world without considering the consequences were running on visible budget deficits and sovereign domestic as well as foreign debts.

With the eruption of recession, on one hand, the government revenue started moving down equally with the decline of markets. On other hand, many governments in order to bring the confidence back to market unwillingly started bailing out financial institutions. The measure set public budget on edge of precipice and pushed governments further into huge debts that many are unable to escape the possible defaults.

Thus, the prospective of an economic chaos is booming and there are voices heard about a global cooperation and collaboration to deal with challenges jointly otherwise the global recession would wash away countries one by one. What politicians and financial institutions chiefs can do actually?

Though often there are statements for system change, the decision makers understand there is no alternative to replace. So, what they prescribe for the economic pain is technical fixation through serious sticking to global interests rather than national ones. And also bail out of crisis by the countries having cash.