Financial crises take time to mature. Yet until the end is nigh, apologists will insist that nothing needs to change. Thus valuable time is wasted.
Last year, Iceland was the obvious example of this problem. Now it is Greece, a eurozone member.
Back in January, S&P had downgraded Greece’s bonds, due to debt concerns. And they were already yielding record amounts versus the German benchmark. Since then, nothing has really changed, and there is talk that Greece may soon need a rescue package from the International Monetary Fund (IMF).
Will Greece now move to tackle its high debt, low growth problem? Probably not, as the government is already facing major social unrest. But as Germany’s Budget spokesman, Norbert Barthie notes, Greece is just “the tip of the iceberg” within the eurozone. Portugal, Ireland, Italy and Spain all face similar problems, whilst Austria had this week to nationalise its 6th largest bank following losses in E Europe.
The concern, as the Wall Street Journal notes, is “that the Continent’s economic recovery could be derailed.” Already, it says, the growing crisis is forcing “financially stronger countries to think about how to shore up other members of the euro zone against a potential financial-market rout“. This may still be a relatively small risk, but it is no longer one that can be safely ignored by the chemical industry.