As I wrote a few weeks ago, even if the Germans kick Greece out of the Eurozone and they go back to the drachma and a future of austerity, there are other countries in the same shape waiting in the wings. Spain, Portugal, Italy, Ireland . . . know one really knows where the ripples with stop. It's a dangerous time for the world economy. Yesterday the markets seemed happy that Spain will get a $125 billion bail-out - today, not so much.
This article describes the volatile situation succinctly:
Spain, Italy in market storm ahead of Greek vote
12 June 2012 | 14:45 | FOCUS News Agency
Madrid. Investors pounded Spanish and Italian debt on Tuesday, beset by grave doubts over a Spanish banking rescue and fears of a looming Greek exit from the eurozone, AFP reported.
Despite eurozone powers striking a deal Saturday to extend Spain a banking sector rescue loan of up 100 billion euros ($125 billion), the alarm gripping bond markets showed no sign of relaxing.
Two major concerns stood out: doubts over Spain's outlook even with the mega-loan and this Sunday's Greek elections, which in a worst-case scenario could send Athens back to the drachma.
It was impossible to say how things may turn out, said Edward Hugh, an independent economist based in Barcelona.
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