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Is It Getting Too Late To Save the Euro Zone?

Is It Getting Too Late To Save the Euro Zone?

 

Last week ended with the Dow closing 241.58 points down and falling below the 11,000 mark. Both global markets and Wall Street are likely to have their worst quarter in three years. Fears of Greece defaulting on its $485 billion of debt and of a global economic shutdown continue to fuel worries of a credit crisis similar to that in 2008 after the fall of Lehman Brothers.

It’s Sunday night — or more likely Monday morning as you’re reading this — and things aren’t looking too much rosier. Greece has already said that it will miss its budget deficit targets for 2011 and 2012: Its 2011 deficit is projected to be 8.5 percent. This is less than the 10.5 percent of 2010 but short of the 7.6 percent target that had been agreed with the European Union and the International Monetary Fund, in order for Greece to receive the next bailout installment of 8 billion euros ($10.9 billion) to avoid defaulting on its debts.

As eurozone finance ministers prepare to meet on Monday, there is a growing sense that Greece will default. The country’s economy is expected to contract by 5.5 percent this year and 2 percent next year. To qualify for the next tranche of the bailout, Greece has passed $8.8 billion in austerity measures and is preparing to lay off 30,000 public sector workers, most of whom are over 60 years old. The unpopularity of the measures, which follow previous rounds of salary and pension cuts and tax raises, is apparent as the country is hit by renewed waves of strikes (of most of the public transit system last week) and protests. Some Greeks have turned to bartering to get by on less and less.

Brian Beutler at Talking Points Memo says simply that “the European monetary union is on the verge of collapse.” Time is running out for eurozone finance ministers to figure out what to do not only to prevent a Greek default, but to staunch what has become a growing crisis in the EU, with repercussions for the the world economy. The 17 European Union nations have less than five weeks to show investors that they indeed have some plan to keep the eurozone together, before a November summit meeting of the Group of 20.

The euro has dropped to an eight-month low against the dollar prior to Monday’s crisis meeting of European country ministers. As of 9:13 a.m. in Tokyo, the euro has fallen to $1.3368 per dollar from $1.3387 in New York last week, after declining to $1.3322 — its weakest since January 18.

 

Related Care2 Coverage

A Greek Default and Obama’s Re-election Prospects

Occupy Wall Street Protests Spread Across The Nation

Greece Could Run Out Of Money By Mid-October

 

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107 comments

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3:01AM PDT on Oct 14, 2011

The cause of the weakness in Greece, is the PAST GOVERNMENT which has told the deficit of their finances was only 3%... in reality it was 12%. This RIGHT government made gifts to the riches who didn't need it with money the government didn't have... The new ( left ) government should take that mony back with special contributions, and help the poors who are the victims of the crisis ( special rebate of 10% of their taxes for the 10% of the poorest? )

2:53AM PDT on Oct 14, 2011

As citizen of the eurozone, i 'd like to propose this to save Greece ( and the other countries who 'll be the next victims:
+ european solidarity
+ austerity for the riches ( who can pay ) and "relance?" for the poors who need help
Concretely
- in every country of the eurozone, the 1% of the most riches of the country pay a special contribution of 1% of their assets ONCE
- in every country of the eurozone, the 1% of the biggest incomes of the country pay a special contribution of 1% of their revenue in 2011 only
- in Greece, the 10% of the most riches of the country pay a special contribution of 10% of their assets in 2011 ONCE
- in Greece, the 10% of the biggest incomes of the country pay a special contribution of 10% of their revenue in 2011, 9% in 2012, 8%...

5:11PM PDT on Oct 11, 2011

The only people that don't seem to be suffering is the politicians as usual.I think that the whole system needs an overhaul starting by diverting money to those in need and not those who can claim expenses.

4:52AM PDT on Oct 10, 2011

It's never too late. They should know that it is affecting their country more

7:01AM PDT on Oct 7, 2011

Back to the subject in hand...the article could really be asking if it is too late to save the current monetary system overall? Hopefully, the answer will be 'probably'.

The moment currency became a commodity and not a means of exchange, meant that you have a virtual economy where no one does any real work or produce goods but rather feeds off greed and weaknesses. As usual, a system for a handful leading the vast majority by the nose.

The fact that speculation can bring down a currency is criminal in itself but do we see any indignant politicians getting up to denouce the fact? If anything in this world is immoral, it has to start here. The 'system' needs to crash (it is actually already doing a pretty good job of heading for the wall) and be replaced by a 'real' economy that is at the service of the population at large, rather than a gangrene that invades all walks of life.

6:51AM PDT on Oct 7, 2011

Oh boy, Christos V, have you got a problem! Rather than just dishing out quotes in misspelled English, do some real History homework: why do you think there was the Restoration after Cromwell? But no matter...Greece might as well sink into the Med and be done with it.

However, when I did have the pleasure of visiting Greece in the past, I did not have the misfortune to cross any Greeks with your attitude.

5:54AM PDT on Oct 6, 2011

Christos V, I do take it you are referring to myself, Britain joined the EU in 1973, a long time before your country may I add, England, Wales and Soctland with Northen Ireland will always form Great Britan or the UK, so I would be most interested as to where you get that Scotland Wales are Independant from the UK a would assure you, they are not, I would suggest that you find out the history of the of another before you make comment on another Country

if the UK does leave the EU we would £40 million better off, I would very interested what does your country Greece pay into the EU, the reason why, I ask, I know there is only 5 Countries who pay the most into the EU and Greece is not one of the 5, infact Greece did not join the EU until 1981,

I am also aware the your country Greece are at risk from the European Commission that you have leave the EU meaning you Country is costing to much to keep bailing out, so my overall suggest to you Christos as I already stated, ensure you findout about another country history before making comment and findout how much your country pays into the EU and how much your country have been bailed out by the EU, and for the Eurozone blame your Government. Britain, or do you want me say England Ireland Scotland and Wales were not so foolish.




3:42AM PDT on Oct 6, 2011

Τo Ray S Who told you that there is a single intelligent European who wants the obstructionist,conceited and vain country called England in the EU (for the Scottish and the Welsh people as far as I know do bot exhibit that behaviour that is really a trait of the little englander mentality.or as Cromwell said when he disbanded the Long Parliament "you have stayed too long for any good that you have done.Be gone I say and le us be done with you.You little engladers we are welcome to leave the EU and to go to play the role of the performing seals in the US circus. Your alcohol drenched intelligence may be sufficient for that kind of performance. Just before you leave take with you the Pakistani/African and African illegal immigrants.We in my country have enough paying the bill of the crimes and the thiving and bloodthirsty entity called "British Empire" which to use the Tacitus formula "created devastation and called it peace" for we have not forgotten the nefarious role played by the said "Empire" in the Asia Minor Disaster or in the Cyprus case.you hope for the dissolution of the EU ans I pray for the break of the falsely called "United Kingdom" Long live Independent Scotland (soon enough) and Independent Whales (when the times comes)
@For any Americans (possible fans of Tom Kratman?)who day daydream about the end of EU Isay this: dream on!

4:09AM PDT on Oct 5, 2011

Goldman Sachs helped hide Greek debt off book before it joined the Euro. They are now speculating against Greece and the Euro. It is clear that this was a possble outcome from the start. One of the biggest issues the U.S. has with Iran was a new oil trading platform which traded in Euro's. If the dollar stops being the reserve currency and oil is no longer traded in it the U.S. currency will collapse. The U.S. way of life already under threat will be further deminished.
It used to be South America that stabalised the U.S. but they've grown wise. This is a currency war plain and simple.

6:36PM PDT on Oct 4, 2011

Greed is the cause of all the short comings as well as the long falls!

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Kristina Chew Kristina Chew teaches ancient Greek, Latin and Classics at Saint Peter's University in New Jersey.... more
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