Greece is politically and economically bankrupt. Unemployment is 25% and destined to get much worse with the latest round of austerity measures.
Worse yet, Greece is still encumbered by massive layers of bureaucracy that makes it difficult to get anything done.
Yesterday, in a massive breach of security, Greek citizens stormed the defense ministry. This has German chancellor Angela Merkel willing to take a chance on a trip to Greece next week.
LONDON: The euro tumbled on Tuesday and the region's stocks and bonds jumped after the European Central Bank signalled it would speed up its 1 trillion euro bond-buying programme for the next two months ahead of an expected summer lull. World stocks were already testing all-time highs after another jump in Chinese stocks and a record close on Wall Street, and European markets shot up after top ECB policymaker Benoit Coeure talked of adjusting the bank's buying programme.
An internal Bundesbank document discovered by Der Spiegel states, in opposition to the comments by Germany's electioneering Chancellor Merkel, that Europe "will certainly agree to a new aid program for Greece" by early 2014 at the latest. As Reuters reports, Frau Merkel has repeatedly played down suggestions Greece will require more aid (or debt relief) in light of German voters major skepticism over moar of their money being flushed into the Mediterranean.
The global economy is beset by an array of political risks, from terrorism to the U.K.’s potential departure from the European Union, at a time when growth is at best mediocre, IMF Managing Director Christine Lagarde said.
The world continues to believe that Europe’s woes are solved. The EU Crisis went into overdrive in the spring of 2012 when the Spanish banking system as a whole nearly collapsed. Having pumped €1 trillion into EU banks via its LTRO 1 and LTRO 2 programs in December 2011 and February 2012, the European Central Bank found itself facing a problem far greater than Greece (Spain’s banking system is over €3.7 trillion assets in size, compared to Greece’s €338 billion) and on the verge of losing control of the entire system.