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Leading Greek economists and bankers yesterday warned George Papandreou, prime minister, that he had to announce bold initiatives to rescue the country's collapsing bond market and avert the possibility of defaulting on a rising public debt.
Yannis Stournaras, an Athens University economics professor and former chief adviser at the finance ministry, said: "Other countries in trouble have already taken measures. If we don't quickly follow suit the adjustment will be imposed by markets and it will be violent."
Greece and Ireland are among countries in an “intolerable” economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc.
“Countries like Ireland and Greece may not be able to grow out of the current crisis,” Barrow said in a telephone interview today. “With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU may happen next year.”
Originally posted by hoghead cheese
What gets me is why haven't the US came out and bailed them out.
The EU’s authorities, rightly or wrongly, are more afraid of the moral hazard of a bail-out than the possible spillover effect of a hypothetical Greek default to other eurozone countries. If faced with a choice between preserving the integrity of the stability pact and the integrity of Greece, they are currently minded to choose the former. To safeguard what is left of the stability pact, they are determined to link any help to a country’s willingness to comply. Otherwise the EU fears it might lose all leverage over budgetary processes elsewhere in the eurozone. And no country in the eurozone has flouted the pact more than Greece.
If the Greek government refused to comply, which is quite possible, the next step could be the penalty procedure under the stability pact. So instead of helping Greece, the EU might be asking Greece to pay a penalty. This in turn would aggravate Greece’s financial position in the unlikely event that the government would agree to pay it.
Originally posted by silent thunder
The US probably won't be able to afford its global network of bases much longer (exept in a few "crucial" places -- read, where there is oil), so Europe will be saddled with the additional expense of providing for its own armed forces or perhaps embracing the bear hug of Mother Russia.