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| Tue May 11 20:59:49 2010 Greece's Surrender |
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| Tue May 11 20:59:49 2010 Greece's Surrender The European Union brings the hammer down. |
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| Just Sunday I blogged about
Sovereign Bankruptcies. I was mostly worried about the United States, but lately
Greece has been stealing the headlines due to its imminent bankruptcy instead.
On Monday the European Union announced it was going to bail out Greece with a $1 trillion stabilization package, which is, to quote the article, "shock and awe." Markets rebounded on the news after last week's slides, but were a little less enthusiastic today. People are worried, rightly, that bailing out Greece with more loans could ultimately make the problem worse. But today Slate had a great article about the EU bailout. One of my favorite quotes, referring to Greece's end of the deal:
Basically, Greece had to agree to a long list of deep structural changes which their parliament must enact over the next several years, with some deadlines in June 2010! Overall, I think this is a good thing. The European Union made it clear it will protect its own, but also imposed serious changes on how Greece does business (including making it easier for Greeks to do business!). One scary sidenote: central banks are realizing that an important component of bailouts is the size. They feel like they need to put a lot of money on the table to calm markets. Obviously, that can't keep escalating like it has. Which means the next bailout may already be doomed--no one will have the money to trump the EU's $1 trillion package. So again, it all comes down to not spending more than you have. Comments |
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