European markets bounced back from early losses on news that the 17-country eurozone has narrowly dodged recession, thanks mainly to strong growth in Germany, though concerns persisted that Greece's political impasse could eventually force it to leave the currency bloc.
Major debt restructuring for both Cyprus and Greece will probably force the struggling euro zone countries to leave the single currency, according to Citigroup's latest economic outlook, which warned markets could again be hit by escalating fears.
FRANKFURT — The eurozone crisis is not over, France’s reforms are slipping and the Bundesbank has set aside billions in new provisions against what it sees as risky European Central Bank moves, Germany’s central bank said on Tuesday.
Presenting Bundesbank 2012 results that showed a sharp increase in its risk provisions, the German central bank’s chief, Jens Weidmann, urged governments to tackle the roots of their troubles with reforms.
The eye of the hurricane over Southeast Europe may soon be shifting, exposing Greece to the same 150 mph gale turmoil everyone has grown to love and expect over the past three years as soon as this month, when a new proposal by Greece is due on how to cut a massive 150,000 public sector jobs: a move which will result in an immediate surge in public unrest, and an exponential jump in strike activity. As Bloomberg reports, "Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing.
One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political readers masquerades as news in the US. And we have a less controlled press than, say, Italy does.
So I will give readers some fresh data points and let you duke it out.
The Independent reports Finland warns of euro exit rather than pay debts of others
FINLAND would consider leaving the eurozone rather than paying the debts of other countries in the currency bloc, Finnish Finance Minister Jutta Urpilainen has said.
In a newspaper interview today she said she'd consider crashing her AAA-rated country out of the eurozone.
Here is an interesting headline from the Greek website Ekathimerini: Withdrawals up again due to uncertainty.
The political polarization and uncertainty regarding Greece’s position in the eurozone generated a fresh spike in bank withdrawals last week.
Those looking for a bit of humor in the European debacle can find it in statements from Jean-Claude Juncker, head of the eurozone finance ministers.
Juncker says "I don’t envisage, not even for one second, Greece leaving the euro area. This is nonsense. This is propaganda. We have to respect Greek democracy."
Bear in mind this statement comes from the same man who said "When it becomes serious, you have to lie."