The standoff between Greece and its creditors on how to proceed on its bailout program risks triggering a simultaneous cash and credit crunch, which could drive the country out of the euro area.
Here’s how a worst-case scenario could unfold:
Greece's government has about a month's cash left. That's according to sources inside the government that spoke to Bloomberg. The bailout funds Greece gets from its "Troika" of international lenders (the European Commission, the ECB and the IMF) finish at the end of February.
Anti-euro sentiment in Italy is already very strong and about to get stronger.
Eurointellihence has come interesting comments today regarding Italy.
demonstrations and protests [in Spain] are very likely now to spread to Italy.
The country’s largest union, CGIL, said there would be a public-sector
strike in September to oppose the Italian government latest austerity
plan, Il Fatto Quotidiano reports.
On June 1, former Italian Prime Minister Silvio Berlusconi said "Italy should dump the euro unless the European Central Bank agreed to inject more cash into the economy". One day later Berlusconi said the idea Italy should dump euro was a "joke".
NEW YORK: Global equity markets eased on Monday on a dip in energy shares and fears a resolution to Greece's financial woes is not in sight, leading the euro to weaken against the dollar. A cut in Chinese interest rates initially lent support to Asian and some European shares, especially miners, as China is the world's biggest consumer of copper and other metals. But signs that US shale oil production was recovering sent oil prices lower and made energy the sector that weighed the most on the S&P 500.
NEW YORK: Global equity markets eased on Monday after a cut in Chinese interest rates initially kept shares near record highs, but a lack in progress in resolving Greece's financial woes weighed on stocks and weakened the euro against the dollar. Gains by mining stocks helped to support some European equities after the rate cut in China, the world's biggest consumer of copper and other metals. But signs that US shale oil production was recovering sent oil prices lower and made energy the biggest losing sector on the benchmark S&P 500.
Report Shows Netherlands Would Benefit by Leaving Eurozone
Inquiring minds are reading a 73 page detailed report The Netherlands & The Euro that explains country by country why Italy, Greece, Portugal, and Spain are going to need lots more money, and the Netherlands and Germany will end up footing the bill.
Bloomberg reports European CEOs Move Cash to GermanyGrupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank.