{"id":281814,"date":"2010-02-05T09:01:00","date_gmt":"2010-02-05T14:01:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/goldman-if-they-get-greece-wrong-all-of-southern-europe-will-fall-like-dominos-and-30-of-euro-gdp-would-be-at-risk-2010-2"},"modified":"2010-02-05T09:01:00","modified_gmt":"2010-02-05T14:01:00","slug":"goldman-if-greece-is-handled-wrong-all-of-southern-europe-will-fall-like-dominos-and-30-of-euro-gdp-would-be-at-risk","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/281814","title":{"rendered":"Goldman: If Greece Is Handled Wrong, All Of Southern Europe Will Fall Like Dominos And 30% Of Euro GDP Would Be At Risk"},"content":{"rendered":"<p><div style=\"float: left; padding: 15px 15px 15px 0;\">\n<script type=\"text\/javascript\">\/\/ <![CDATA[\ntweetmeme_source = 'moneygame'; tweetmeme_service = 'bit.ly';\n\/\/ ]]><\/script><br \/>\n<script src=\"http:\/\/tweetmeme.com\/i\/scripts\/button.js\" type=\"text\/javascript\"><\/script>\n<\/div>\n<p>Of Europe&#8217;s basket case financial economies (though we&#8217;ll point out that the U.S. could soon fall into the basket case category as well), Greece still sticks out like a sore thumb.<\/p>\n<p>Just look at this comparison of each PIIGS nations&#8217; twin deficits:<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b6c20a00000000000a9a0d9-450-\/chart.png\" border=\"0\" alt=\"Chart\" width=\"450\" \/><\/p>\n<p>Or CDS spreads:<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b6c22ca0000000000309cbe\/chart.png\" border=\"0\" alt=\"Chart\" width=\"450\" \/><\/p>\n<p>While it is pretty well known by now that Greece is in definite trouble, Europe&#8217;s other teetering economies could easily fall like dominoes if a Greek crisis is mishandled according to Goldman.<\/p>\n<p style=\"padding-left: 30px;\"><span style=\"text-decoration: underline;\">Goldman:<\/span> The twin deficits provide some guidance to the relative vulnerabilities (Chart 1), and in terms of comparisons of public-sector debt sustainability, these other countries all require medium-term primary surpluses that are only a fraction of Greece&rsquo;s to stabilize their debt ratios for the same growth rate and real interest rate. That said, the entire Euro-zone periphery faces large financing needs and, to contain the cost of this financing, governments have started to outline fiscal measures to be implemented this year. Table 1 summarizes the key macro financial indicators for the Euro-zone periphery.<\/p>\n<p style=\"padding-left: 30px;\"><strong>Contagion across Southern Europe will be a function of the policy reaction in Greece, the timing and extent of non-commercial financial support (if it turns out to be necessary)<\/strong>, ECB policies and policy actions in the individual countries.<\/p>\n<p style=\"padding-left: 30px;\"><img decoding=\"async\" src=\"http:\/\/static.businessinsider.com\/image\/4b6c23c20000000000c96d84\/chart.png\" border=\"0\" alt=\"Chart\" width=\"550\" \/><\/p>\n<p>So focus on Greece, and hope the Eurozone gets it right. Because the stakes are huge:<\/p>\n<p style=\"padding-left: 30px;\"><strong>If contagion from Greece engulfs other countries, then up to 20%-30% of Euro-zone GDP could be under severe stress.<\/strong> Were a major financial instability event to develop, we would expect the ECB to pause in its exit strategy, and then, if needed, reverse course and reinstate longer-term financing.<\/p>\n<p><em>(Via Goldman Sachs, The Euro-zone Challenge: Greece and Contagion, Erik F. Nielsen, 4 February 2010)<\/em><\/p>\n<p><a href=\"http:\/\/www.businessinsider.com\/goldman-if-they-get-greece-wrong-all-of-southern-europe-will-fall-like-dominos-and-30-of-euro-gdp-would-be-at-risk-2010-2#comments\">Join the conversation about this story &#187;<\/a><\/p>\n<p><b>See Also:<\/b><\/p>\n<ul>\n<li><a href=\"http:\/\/www.businessinsider.com\/just-when-greece-thought-the-worst-was-over-its-biggest-union-goes-on-strike-2010-2\">Awesome Timing: Greece&#8217;s Biggest Union Goes On Strike<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/pimco-california-bond-spreads-about-explode-just-like-greece-2010-2\">Pimco: Forget Greece, California Bond Spreads Have Soared Back To Crisis Levels<\/a><\/li>\n<li><a href=\"http:\/\/www.businessinsider.com\/no-wonder-spain-is-such-a-financial-disaster-nobody-pays-taxes-there-either-2010-2\">Spain Is On The Brink Of Financial Collapse Because Nobody Pays Taxes<\/a><\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/TheMoneyGame\/~4\/lAvnC9BDRlE\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Of Europe&#8217;s basket case financial economies (though we&#8217;ll point out that the U.S. could soon fall into the basket case category as well), Greece still sticks out like a sore thumb. Just look at this comparison of each PIIGS nations&#8217; twin deficits: Or CDS spreads: While it is pretty well known by now that Greece [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-281814","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/281814","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=281814"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/281814\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=281814"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=281814"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=281814"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}