A beautiful island in Greece was the setting for an ugly pronouncement from Prime Minister George Papandreou today : His country is broke and wants to activate a bail-out deal arranged with the European Union and the International Monetary Fund…to the tune of 60 billion dollars.
“The moment has come, since markets aren’t giving us time,” Papandreou said, “to make the decision, so that Greece can have support.”
The move came as fears rose that Greece would not make the deadline for refinancing its debt next month, that its money woes were bigger than feared, and that it could even face default.
It also came as public workers conducted more strikes effecting everything from ferries to hospitals as the Greek government implements needed economy moves.
“The IMF will be demanding austerity measures that are politically unpopular,” Terry Roth of Dow Jones told Fox News, “we could see more public protest.”
Those protests have already gone violent and there could be more trouble. The current bail-out package will only be enough, we are told, to get Greece through this year. There are more cuts to come.
While there is resistance from Germany and others to helping Greece, the risk of not helping and seeing problems grow and spread, is even bigger.
“Everybody, despite some concerns and opposition,” economist Vassilis Vlastaklaris of Beta Securities is quoted as saying, “will be convinced there is no way around ‘solving’ Greece.”
As for why the US should care about and help rescue Greece, analysts tell us it’s already had an effect on our markets, it could have a “knock-on effect” for other European (and US-allied) countries, and might even cast a shadow over American state and municipality efforts to raise their own funds.
It IS a “small world” after all.