Is Greece going to set off the long feared next wave of the Great Recession?

Greece's debt crisis could spread across Europe


By Neil Irwin
Washington Post Staff Writer
Friday, May 7, 2010

MADRID -- A third straight day of decline in world financial markets on Thursday was vivid evidence of a scary proposition: That the fiscal crisis that began in Greece months ago is spreading across Europe like a virus, causing growing doubt even about the fates of nations with far more manageable levels of government debt.

Back when the global financial crisis began in earnest in 2008, Europeans were quick to blame it all on Americans who lent unwisely and borrowed excessively. So it is more than a bit ironic that, having long denied its own forays into unwise lending and excessive borrowing, it is Europe that seems to be leading the global economy into the second phase of the crisis.

Quote:

Greece's debt crisis..........

For those keeping score I raised this issue on April 22, when pretty much no one else was talking about it.
So much for HighSea's assertion that I am "ill-informed and spreading misinformation".

January 3: "More details anticipated on Greek bail-out" [EUobserver]
January 28: "Greece denies a bail-out is needed" [BBC]
February 11: "Europe Commits to Action on Greek Debt" [NYT]
February 15: "Opposition Grows in Germany to Bailout for Greece" [NYT]
February 28: "European Union Moves Toward a Bailout of Greece" [NYT]
March 15: "Finance ministers to discuss Greek bail-out options" [EUobserver]
March 25: "Europeans Reach Deal on Rescue Plan for Greece" [NYT]
April 15: "Greece seeks meeting to clarify bail-out deal" [EUobserver]
April 19: "Greek bailout talks on hold as the volcanic debris delays flights" [The Guardian]
April 21: "Leaders Start to Formulate Details of Greek Aid Program" [NYT]
April 22: "Merkel continues 'go-slow' rhetoric on Greece [EUobserver]
April 23: "Greece formally requests EU-IMF aid" [EUobserver]
April 26: "Greece's international rescue deal takes shape" [BBC]
April 28: "Greek debt crisis: Euro leaders call emergency summit to avert meltdown" [The Guardian]
April 29: "Europe Acts Swiftly on Long-Delayed Greek Bailout" [NYT]
And, my favorite, today: "Greece is Said to Be Close to Deal on a Rescue Plan" [NYT]

And again....[...]
What was that you said High Seas?? Care to make a retraction....

This would be simply laughable if another worldwide financial collapse weren't at stake

Though it is difficult to predict which way things will go in the coming years, Europe's ability to tolerate this, so far beneficial, ambiguity is likely to be the first casualty of the current crisis.

I showed your analysis to a student of the markets and he said you should be running things and added, as a rider, that you are a ******* genius.

only £200 each and that's only a hour of a fairly posh whore's time.

what can I get for A$26. 55 ???

...... your babbling about the EU is so out of context that it would be an insurmountable to educate you.

Last Friday, as leaders in Europe squared off over a high-stakes bailout for Greece, Robert Mundell, the Canadian-born economist widely regarded as the father of the euro, was in Bulgaria attending the world chess championship. It’s been more than 40 years since Mundell laid out his vision for a common European currency, work that earned him a Nobel prize in 1999. And after making the ceremonial first move of the match"akin to tossing out the first pitch in baseball"Bulgarian reporters asked the 77-year-old Columbia University professor to sum up the Greek drama in chess terms. Was Greece in check, or checkmate? In other words, does the country have any hope left, or is it game over? “I would rather describe the current situation as zugzwang,” Mundell reportedly replied, using the German term to describe the moment when a player is forced to make a move even when it’s going to be harmful.

Outside the eurozone, a total of 23 countries and territories that do not belong to the EU have currencies that are directly pegged to the euro including 14 countries in mainland Africa (CFA franc and Moroccan dirham), two African island countries (Comorian franc and Cape Verdean escudo), three French Pacific territories (CFP franc) and another Balkan country, Bosnia and Herzegovina (Bosnia and Herzegovina convertible mark). On 28 July 2009, São Tomé and Príncipe signed an agreement with Portugal which will eventually tie its currency to the euro.[34]
With the exception of Bosnia and Herzegovina (which pegged their currency against the German mark) and Cape Verde (formerly pegged to the Portuguese escudo) all of these non-EU countries had a currency peg to the French Franc before pegging their currencies to the euro. Pegging a country's currency to a major currency is regarded as a safety measure, especially for currencies of areas with weak economies, as the euro is seen as a stable currency, prevents runaway inflation and encourages foreign investment due to its stability.
Within the EU several currencies have a peg to the euro, in most instances as a precondition to joining the eurozone. The Bulgarian Lev and the Estonian kroon were formerly pegged to the German mark, other EU memberstates have a direct peg due to ERM II: the Danish krone, the Lithuanian litas and the Latvian lats.
In total, over 150 million people in Africa use a currency pegged to the euro, 25 million people outside the eurozone in Europe and another 500,000 people on Pacific islands.