In other cheery news this morning:
Euro crisis goes global as leaders fail to stop the rot
The growing crisis in the eurozone threatened to undermine the global economic recovery as markets plunged across the world on fears that European leaders may not be able to contain the debt contagion spreading from Greece.
Stock markets in London, New York, and Shanghai dived following criticism that much delayed and half-hearted measures to rescue Greece were undermining confidence in wider efforts to kick start the world economy.
European shares finished the day at a six-month low while the Dow was down around 1% at 10,424. In Asia, the Shanghai stock market fell to an eight-month low of 2688, down 6.8% on the previous day.
An emergency summit of the 16 leaders of the countries using the single currency was held in Brussels , with Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France demanding tougher and quicker regulation of the financial markets in what looked like a doomed attempt to contain contagion from the Greek drama.
Capital Economics said the situation was delicately balanced and could become “devastating”: “So far, the crisis in Greece has not caused the money markets to freeze up. But if this situation were to change, the impact on risky asset prices could be devastating and derail the fragile global economic recovery. Policymakers know this only too well after the events of September 2008.”
Cracks have already begun to appear in the system. The cost of insuring against a default by banks in the euro-zone has risen sharply in recent days.
Europe’s sovereign debt crisis is making it harder for European banks to get their hands on dollars and may require their central banks to step in with short-term liquidity to keep up the flow of money through Europe’s economy.
One particularly interesting snippet from The Guardian piece above. Many of the writers here would argue that much of society can be understood as a battle between a tiny minority of ultra-rich and a large majority of workers – money vs. people. But you don’t often see that view stated by major politicians and reported by the media quite as nakedly as this:
While pleading for the funds, Merkel has rounded furiously on the markets. After stating earlier this week that “politics have to reassert primacy over the financial markets”, she said that the “speculators are our opponents” and described the banks as “perfidious”.
Describing politicians as being in battle with the markets, she added: “Like all my other colleagues, I want to win this fight.”
Go for it Angela Merkel! Time for the people to take back control. Time for a real change.