Wednesday, February 10, 2010

The Eurozone financial crises

This story is pretty easy to understand.  European banksters, who are at LEAST as greedy and foolish as their American or British counterparts, have managed to stampede everyone into hopeless debt.  When folks can't pay off these loans, governments are being asked to pay them off instead.  Quite naturally, governments if they have any pretense of being representitive democracies are balking at the idea of cutting pensions and health care to bail out crazy banksters and their equally crazy assumptions.

We start with a background story:
Europe Risks Another Global Depression
The entirely pointless G7 meeting this weekend only served to underline the fact that Europe is again entering a serious economic crisis.
At the end of the meeting yesterday, Treasury Secretary Tim Geithner told reporters, “I just want to underscore they made it clear to us, they the European authorities, that they will manage this [the Greek debt crisis] with great care.”
But the Europeans are not being careful – and it’s not just about Greece any more. Worries about government debt and associated public sector liabilities (e.g., because banking systems are in deep trouble) have spread through the eurozone to Spain and Portugal. Ireland and Italy are next up for hostile reconsideration by the markets, and the UK may not be far behind. 
What are the stronger European countries, specifically Germany and France, doing to contain the self-fulfilling fear that weaker eurozone countries may not be able to pay their debt – this panic that pushes up interest rates and makes it harder for beleaguered governments to actually pay? more
Here we see this crises covered on BBC complete with a greedy bankster from central casting and Joseph Stiglitz--a Nobel Memorial Prize winner.

Then we see some of the "debates" being inflicted on sovereign governments by the banksters who are willing to try anything EXCEPT for having the crooks take a haircut.
Berlin looks to build Greek ‘firewall’
Published: February 9 2010 22:58
Financial markets surged on Tuesday on hopes of a European rescue plan for Greece, as officials in Berlin admitted it was looking at how to construct a “firewall” to prevent the debt crisis spiralling out of control.
A German government official said that the steep decline in the euro and pressure on bond prices had forced Berlin to ”take a significant step” in how to deal with the crisis.
Germany is worried that any flight out of Greek assets, especially government bonds, could hit its banks and those in other eurozone countries.
As the eurozone’s dominant economy, Germany would be expected to take the lead in marshalling financial support for a Greek bail-out. There are fears the crisis could spread to other eurozone states with big deficits such as Spain and Portugal.
”We’ve had to face up to the fact that what is now a Greek problem could turn into a European one,” the official said. more
Lots of folks out there scrambling to find a solution.
Darkness Falls Over A Europe In Chaos, As German, Swedish, And UK Leaders Have Different Ideas For Solving Greece
Gregory White | Feb. 9, 2010, 5:33 PM
Germany came out today saying they are not going to back stop Greece, and now they want to build a "firewall" around it so it doesn't hurt its neighboring countries, according to the FT.
While the Germans are talking about containing the problem, The UK and Sweden want to call in the big guns.
"The IMF has the technical knowledge,"said a Swedish official to the FT. Their UK equivalent agreed, “The fund has the expertise and the resources.” more

Here's Stiglitz's solution
Greek crisis intensifies as Joe Stiglitz calls for Europe to 'teach the speculators a lesson'
Pressure on the Greek government to put its books in order or face a bail-out intensified as investors continued to flee its debt, pushing the country further towards a possible debt spiral.
By Edmund Conway, Economics Editor
Published: 9:05PM GMT 08 Feb 2010
Yields on Greek debt rose by 14 basis points, as investors digested the fact that G7 and eurozone finance ministers refused at their weekend summit to provide more detail on a rescue package for the troubled economy.
Alongside Portugal, Spain, Italy and Ireland, Greece has been the focus of widespread market selling over the past few weeks, with investors fearing the countries may be unable to repair their balance sheets alone. The interest rate on Greek 10-year benchmark debt is now 6.75pc, compared with fellow euro member Germany’s rate of 3.14pc.
Suspicions that the Greek crisis could give way to a full-blown attack on the euro have been reinforced as it emerged that currency speculators have increased their bets against the currency to the highest level since its creation. more
Finally, the view of the poor Greek citizens who are being asked to lower their living standards so the bankers can continue their plunder.
Greek unions launch 1st assault on austerity plan
ATHENS, Greece — A civil servants' strike grounded flights and shut down public services across Greece on Wednesday, as labor unions mounted their first major challenge to austerity measures in the debt-plagued country.
Air traffic controllers, customs and tax officials, hospital doctors and schoolteachers walked off the job for 24 hours to protest sweeping government spending cuts that will freeze salaries and new hiring, cut bonuses and stipends and increase the average retirement age by two years.
"Today, the workers give their reply," loudspeakers blared in the capital's central Syntagma Square, where hundreds of pensioners and striking workers began gathering ahead of demonstrations planned later in the morning. The strike has left state hospitals working with emergency staff only, while national rail travel was also disrupted, although urban mass transport was unaffected.
"It's a war against workers and we will answer with war, with constant struggles until this policy is overturned," said Christos Katsiotis, a representative of a communist-party affliated labor union. more

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