This article talks about the expected results that may happen based on the investors reaction to news that Greek voters will get to hold a national referndum on bailout deal aimed at preventing a default on the country's sovereign debt. The announcement raises doubts about the EU debt deal that would wipe out up to half of Greece's loan payments, but still require unpopular austerity measures by the Greek government.
This goes along with what we have been studying in class with the affects from countries policies and what that means for the rest of the world.
Most of the repercussions of these austerity measures will be felt by the euro zone in terms of lower income levels and shrinking size of their economies. However the US economy will be affected in terms of their exposure to these Greek bonds. So far we already have one victim, MF Global.
ReplyDeleteThe decision that Greece is going to hold a referendum to decide whether or not to accept the European Union's proposal has caused much fear among investors. There were drops in stock prices all around the world because of this, hinting that if Greece chooses to reject the proposal, it could hit companies and investors even harder.
ReplyDeleteThe main idea behind the creation of the Eurozone was for those countries to band together in order reach a level of standing closer to the power of the U.S. That has obviously failed and now they are paying for their "attempt" to be all powerful. The only issue now is how the Eurozone will crumble and what will happen to the world market when it does.
ReplyDeleteWhat's happening with Greece is scary on how much they influence the rest of the world. I agree this is a great example of what we have talked about in class. This is just so scary that we could see a total collapse of a country that is "modernized". I pose the question, what would you do if you lived in Greece right now? I would leave and move to a more stable country. There is nothing secure about Greece.
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