Thursday, May 06, 2010

People Are Finally Aware of the Risk

Europe can seem so far away a lot of the time. But when markets are involved, people seem to realize, eventually, the impact of global communications, and debt.

Big Fat Greek Calamity: Measures to Save the Greek Economy May Worsen the Problem - Newsweek.com How can it make things worse? Because of the stupidity of the Greek people. They don't want to face reality (that isn't just a Greek problem), and they are throwing a fit. Like any immature person or group, the want what they want and they want it now. Who is going to pay for it? Not them, that's for damn sure.
The Greek citizenry, which doesn't like the austerity measures, began rioting on Wednesday. Three people died. Smaller-scale unrest continued after the parliament passed the austerity plan; the markets have responded to this unrest with unrest of their own. If Greece, whose economy represents only 3 percent of the Eurozone, can't push through the measures needed to stop contagion without igniting violent social unrest, how are larger European countries (that's you, Spain and Italy) going to deal with their looming fiscal crunches? It's possible that the vitriolic reaction to Greece's efforts to stop the broader effects of its debt markets might make it more difficult for other countries to cut budgets with alacrity, thus encouraging further contagion.
Because if you expect the Italians to be more reasonable than the Greeks, well, you're dreaming.

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