The situation with Greece’s economic condition seems to be rapidly worsening, and there are increasing fears that the crisis will spread, not just to the other troubled economies of Southern Europe, but to the rest of the region, and to the euro, and even outside the eurozone to the UK.
Some are comparing the situation to the panic that gripped the financial sector, particularly in the USA, after the collapse of Lehman Brothers in late 2008.
And fears about the impact of austerity measures – and protests – are spreading.
Below are some selections from recent news reports…
Europe feels shockwaves as Greece bailout falters: “Fears that Britain could become embroiled in Europe’s deepening financial crisis intensified tonight after Spain had its debt downgraded, Portugal announced tougher austerity measures and Germany questioned whether beleaguered Greece should ever have been allowed to join monetary union.
With direct comparisons being drawn with the panic prompted by the collapse of Lehman Brothers in September 2008, European leaders promised to provide tens of billions of euros to Athens within the next three weeks. But Germany was still insisting on tougher economic reforms from Greece before approving a €100bn-€120bn (£89bn-£104bn) joint EU bailout, leading to fresh turbulence on Europe’s financial markets.”
Angela Merkel is riding Germans’ anger at Greece: “Domestic politics are driving Germany’s response to the euro crisis and Greek debt, but the chancellor may pay dearly for it
Sometimes, world politics and domestic issues don’t go together too well in Germany. The Greek debt crisis turned possible crash of the euro is just another example.”
A Baltic future for Greece? | Mark Weisbrot: “Their plan for Greece is all about pain and punishment. And with a public debt of 115% of GDP and a budget deficit of 13.6%, Greece will be forced to make spending cuts that will not only have drastic social consequences but will almost certainly plunge the country deeper into recession.
This is a train going in the wrong direction, and once you go down this track there is no telling where the end will be. Greece – like Latvia and Estonia – will be at the mercy of external events to rescue its economy.”
The euro: On the brink of crisis: “The governments of the eurozone stand on the brink of their own Lehman moment. The meltdown in Greece has much in common with the storm that eventually toppled the Wall Street bank in autumn 2008. Like Lehman Brothers, the Greek crisis would not normally bother its neighbours – let alone send shockwaves around the world. After all, Greece is a speck in the world economy (contributing 0.5% of global GDP last year, according to figures from Capital Economics); and it is a lightweight in the 16-country eurozone (making up only 3% of the club’s GDP). Yet just as Lehman’s collapse triggered a final, giant crisis for the entire banking system, so Athens could be the first domino in a chain that brings down Lisbon and even Rome and Madrid. Melodramatic? Just ask Portugal’s prime minister, José Sócrates, who yesterday spoke of ‘a speculative attack on the euro and Portuguese debt’ – at the same time as announcing that he would bring forward spending cuts and tax rises pencilled in for 2011. Or speak to Spain’s government, which yesterday saw its credit rating downgraded. If a lid is not put on this crisis soon it could boil over into a continent-wide catastrophe.”
Debt crisis spreads as Greek bailout falters: “• S&P hits Spain with a credit rating downgrade
• Rumours of a €120bn bailout plan for Greece calm the City
• Letting Greece join the eurozone may have been a mistake, admits Angela Merkel after talks with the IMF
• Bond yields hit record highs today as markets shun Greek government debt
• OECD secretary general compares Greece’s debt to the Ebola virus”
International Money Fiends: “The International Monetary Fund devastated the developing world – and now it’s targeting eastern Europe, writes Nick Dearden
It’s stripped millions of people of their livelihoods, but the global economic crisis has brought one institution back from the dead: the International Monetary Fund.
Two years ago, the IMF looked to be on its last legs. It had got to the stage where nobody wanted to borrow its money. Many developing countries started accumulating reserves to avoid ever having to go to (…)”
(Via Red Pepper.)
Greek credit rating cut to ‘junk’ status: “Stock markets around the world plunged today after Standard & Poor’s cut Greece’s credit rating to junk status and downgraded its view of Portugal in the clearest evidence yet that the European sovereign debt crisis is spreading. Italy and Spain are also viewed as vulnerable.”
Triple arson attack with incendiary devices in Thessaloníki, Greece on the 26th and 27th of April: “Gas canister explosions occurred in different parts of the northern Greek city. The two incidents occurred on the early hours of Monday 26/4 against the National Telecommunications Organization (ΟΤΕ) branch and a news agency truck in the west part of Thessaloníki. The following night a Eurobank branch was attacked in Kalamaria, a suburb on the east part of the city.
A communique was sent on Tuesday 27/4 to Athens.indymedia:
‘We all remember, with excessive hatred, from the days of the arrest of Y. Dimitrakis in 2006 the slander of him through the de-ideologication of the act he made. The overextension of the charges from authority, and the TV-snitches slandering anything about him and other comrades from his close friends.”