Global Fears Spark Over Greece

Global Fears Spark Over Greece

“We agreed on the importance of a strong policy response by the affected countries and a strong financial response from the international community,” Obama said, as many of the governments around the world attempted to calm the financial markets with fears Greece’s debt crisis would cause additional stress in the already turbulent European economy.

The Prime Minister of France, Francois Fillon, was quoted as saying that the action to save Greece would “defeat and put an end to speculation which has been unleashed against this country”. He also made a point to mention that there was no reason for the global markets to raise concern about the debts of Spain and Portugal.

The Group of Seven finance ministers met in a conference call to discuss a concern the Federal Reserve officials expressed over a sudden drop in U.S. markets, which was noted as having unusual activity. This prompted the European Central Bank to hold a conference call with the commercial banks in an attempt to gather opinions on the condition of current global money markets. RBS economist Silvio Buruzzo thinks “If it turns out that the economy is not able to withstand the measures, if growth falls much more than forecast there could be social unrest, forcing the government to consider alternative moves in its asset-liability management.”

German Finance Minister, Wolfgang Schaeuble, said “The joint European currency, the joint European economic area were right.” he said. “There is no comparable alternative to them in the 21st Century in the age of globalization. That is why we must defend the joint European currency.” He also told parliament that “aid to Greece would uphold Germany’s postwar legacy of serving peace, 65 years after its darkest chapter in World War Two.”

Even though the Dutch, Italian and German parliaments approved their shares of the Greece package, Germany’s contribution just happens to be the largest of any of the euro zone participants. They are also the country that has incurred the most cutbacks to their economy. Due to these cutbacks, five German academics have filed a legal challenge, becoming only another example of the enormous public outcry to the country’s measure to help Greece. Greece’s 30 billion euro austerity bill imposes years of hard measures on its country in return for the economic rescue by the European Union and the International Monetary Fund. After several days of violent protests in Athens by angry locals, one Greek newspaper referred the plan a “slow death contract.” Such hard times are taking their toll on many of the European countries with economic turmoil and loss of jobs.