Rivets Starting to Pop in Greece
By Global Macro Monitor
The FT reports,
Greece should get its next €8bn in international aid, but its economic outlook is deteriorating so rapidly that a second bail-out plan agreed just three months ago is no longer adequate to keep Athens afloat, international lenders have determined.
The report by the so-called “troika” of lenders to Greece – the European Commission, International Monetary Fund, and European Central Bank – put the blame for Greece’s deteriorating fiscal outlook on both the broader recession and failures by Greek government to implement reforms.
But in the first acknowledgement that mounting unrest within Greece was having an impact on official deliberations, the report – seen by the FT – said the occasionally violent demonstrations in Athens were contributing to economic problems.
“There is no doubt that Greece is undergoing a recession that is deeper and longer than expected,” the report said. “The deterioration in the labour market, with employment falling much faster than expected, uncertainties of political and financial nature, and social unrest and industrial action have weighed on supply and on domestic demand.”
Now watch the Greek protestors turn on each other. Makes you wonder if an EU plan to be announced
Sunday Wednesday is really going to solve the core issues of the crisis in the eurozone: 1) too much debt that can’t be paid back; 2) debt/credit constrained growth; 3) growing unemployment; 4) over levered banks suffering liquidity problems with too much exposure to deteriorating sovereign borrower also experiencing liquidity problems; and 5) overly optimistic expectations in a “one shot kills all” policy announcement.
However, the S&P500 trades like a Kentucky Derby thoroughbred locked in the starting gate – 1190 to 1230-35 – and ready to bolt once the bell rings.