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VIDEO: Greek Meltdown?

Posted on | June 27, 2011 | 10 Comments

Here are a couple of video reports from EuroNews about this week’s big economic question: Can Greece deal with its debt crisis or will default trigger a global economic meltdown?

At the Hot Air Green Room:

The good news, such as it is: French banks have reportedly agreed to a plan to roll over Greek debt. However, Germany’s finance minister doesn’t sound optimistic: “We are doing everything we can to prevent a perilous escalation for Europe but must at the same time be prepared for the worst,” Wolfgang Schaeuble said, invoking the specter of 2008, when “the world was able to take coordinated action against a global and unpredictable financial market crisis.”
Recall that the 2008 meltdown led to the Dow Jones Industrial Average — which had been above 12,000 in June 2008 — falling below 7,000 by March 2009. If Europe dodges the Greek bullet this week, stocks should gain, but the threat of civil unrest in Greece is sufficiently serious that there have been rumors of a military coup.

Katie Benner of Fortune magazine says Greece won’t default:

Of course, if Greece does default, it will do so “unexpectedly.”

Cato’s Dan Mitchell points out that U.S. taxpayers are helping fund the Greek bailout through the International Monetary Fund, and offers these interesting facts:

  • Greece’s GDP is roughly equal to the GDP of Maryland.
  • Greece’s population is roughly equal to the population of Ohio.
  • Despite that small size, in both terms of population and economic output, Greece already has received a bailout of about $150 billion

UPDATE: How bad could it be? Pretty doggone bad:

Contagion of Greece’s debt problems to the rest of Europe could be worse than the collapse of investment bank Lehman Brothers in 2008, Deutsche Bank Chief Executive Josef Ackermann said on Monday. . . .
“If it is Greece alone, that’s already big. But if other countries are drawn in through contagion, it could be bigger than Lehman,” he said at a Reuters banking conference on Monday.


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