Tuesday 23 March 2010

Greece Groans

The financial crisis in Greece has not been resolved for the reason that the European Monetary Union (EMU) cannot decide what to do. Germany in particular has no enthusiasm for a bailout.

It looks as though the impasse will be resolved by bringing in the International Monetary Fund (IMF). But this is not clear-cut as European 'Leaders' are saying anything the IMF does must be within European rules and the major contribution in the settlement must come from within the eurozone.

Remember: Italy, Portugal and Spain are all in the same boat as Greece: high unemployment, huge state debt and locked in to European interest rates. Effectively the four countries have lost the power to take strategic decisions about their economies.

It all has the makings of a slow motion crash which might just be the event which leads to the EMU unravelling. If this happens what chance the European Union will not go the same way?

Beware Greeks bearing gifts!!

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