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Why Care About Greece?

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  • Why Care About Greece?

    Almost half way around the world a little country in Europe is having some financial problems. Their budget deficit has become unsustainably high and the efforts to cut government spending have triggered violent demonstrations. Who cares?

    Well, Wall Street does for starters. The stock market is taking some major hits over concerns as to how wide the crisis will spread. At the same time the value of the Euro – not that long ago riding so high some folks started wondering if it would replace the dollar as the global trading currency – is dropping like a rock. Here is a article in the Market Watch and another in Business Week covering that.

    But wait, there’s more. The debt crisis is spreading in Europe. Greece isn’t the only government with deficit problems, but the real problem is the potential solvency of major banks holding lots of European government bonds. As the Euro plummets in value, so does the value of their asset base. The banks holding that paper aren’t all European, some are American. Another banking crisis here is almost the last thing we need – probably right after a giant oil slick in the Gulf of Mexico. Here’s a New York Times article on the widening crisis, and an article from the Guardian on the United Kingdom’s projected budget deficit which looks to surpass that of Greece.

    What went wrong? There’s a lot of talk about government irresponsibility and bloated social spending, and there is some truth in that. The deeper problem, though, is a ...


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  • #2
    Good point about Greece being part of an imaginary Europe. The same also applies to the US and the other countries which make up the G8, the G20, the WTO, the IMF, etc. These are all based upon agreements reached by and for elites. No wonder the standard of living in the US has stagnated for decades.


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