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CommunityMy FDL

Eurozone and Greek financial crisis…Day 2

cmaukonen 2012-05-09
09 May 2012 50 Drachmae - seriykotik1970

Hi Pups. Well here we go again and I bet you thought this was all taken care of. HA…silly you. But anyway here are the new links to the continuing stories and updates to this situation. From The Guardian and The Athens News.Â  The questions of the day are, Will the Syriza head Alexis Tsipras be able to form a coalition government and will Greece eventually leave the Eurozone ?

From the Guardian’s blog :

2.52pm: The global market rout of the past couple of days is continuing in America now Wall Street has opened.

The Dow Jones Industrial Average is down 106 points in early trading – another fall of almost 1% – and so there is no impetus for a recovery in Europe. The FTSE 100 is currently down 56 points or just over 1%, France’s Cac is 1.2% lower and Germany’s Dax is down 0.6%. The Athens market is getting off comparatively lightly, down just 0.25% but Spain is really feeling the pain – the Ibex is off 3.2%.

As well as the uncertainty over Greece – will it get a government? will it default on its debts? will it leave the euro? – the state of Spain’s banks is also causing concern to investors.

The Spanish goverment was expected to announce plans to support its banking system on Friday, but the country’s ABC newspaper is reporting [in Spanish] the bailout of Bankia – the third largest bank in Spain – could be announced this afternoon. The report says the government will convert the â¬4.5bn or so it has pumped into the bank into shares, giving it around 45% of the bank.

2.23pm: The prime ministers of Spain and Portugal have vowed to work closerly together to ride out the eurozone crisis.

Mariano Rajoy and Pedro Passos Coelho just released a joint statement after holding a joint summit at the Customs House in Porto, Portugal.

They said they would co-operate together at European level, to deliver progress on youth employment and economy stimulus. Both countries suffering some of the highest jobless rates in the EU.

Portugal’s Pedro Passos Coelho didn’t break ranks with the EU party line, though, saying that there could not be any growth without budget consolidation.

Speaking of Portugal… it has agreed to suspend four public holidays for the next five years, in an attempt to stimulate the economy. As Matthew Sparkes points out over on the Daily Telegraph, this includes a holiday celebrating independence from Spanish rule.

And, inspired by the spirit of co-operation shown in Portugal, I’m handing this over to my colleague Nick Fletcher.

2.14pm: Traders simply cannot get enough of Germany’s debt. The yield on 10-year bunds has dropped below the 1.5% mark for the firs time ever in the last couple of minutes, showing that German bonds are being valued at unprecentedly high levels.

So for Spain, Portugal and Italy it’s stay the course. Well at least until their next elections. And investors are buying up German bonds like crazy. Â  Which might turn out not to be a great idea.

And now from Athens News :

4.33pm Greece will not receive any further tranches of aid under the planned bailout programme unless it continues with reforms, German Foreign Minister Guido Westerwelle said in Brussels on Wednesday.Â “Germany would like to keep Greece in the euro zone but whether Greece actually does remain in the euro zone or not lies in its own hands,” he said.
3.56pm Syriza head Alexis Tsipras, has echoed his comments about coalition parties New Democracy and Pasok and the need for them to write up letters that indicate how they will now turn their backs on the memorandum and the promises made to Brussels.Â Tsipras said that “if they accept our proposals as the basis of dialogue; if they reassure us that commitments to German Chancellor Angela Merkel and International Monetary Fund chief Christine Lagarde are not valid, then maybe discussion has a meaning. If they seek to lead the country into a government that is a hostage in their comittments, they should forget it”. Furthermore, he stated that SyrizaÂ “are very concerned for the country’s governance, but foremostly, we are concerned over the contents (of policy). We do not ask for statements of remorse, we ask that shenanigans against the Greek people cease; we ask for honest statements”. His statements came just hours before Tsipras is to meet with Samaras and Venizelos and set up the scene for a series of high-profile and especially difficult meetings between the three men.

So whether or not Greece leaves the Eurozone is not at this point considered a problem in an of itselfÂ  but will this eventually give the left in countries like Ireland and Spain and Italy the motivation to pull for this as well. I think that is the main concern now in Brussels, thought they are not shouting about it.
Enjoy the ride all.

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