Tuesday, July 12, 2011

Greek fire

Economist
July 12, 2011

One can understand the anger of George Papandreou, the Greek prime minister. He has faced down riots, mass protests and party rebellion to push through a second austerity and reform package. But a second bail-out from the euro zone that was supposed to tide Greece over until 2014 has yet to materialise (although it did get a €12 billion ($17 billion) tranche of loans to keep going until September).

Last night's euro-zone statement was filled with promises of action, but the details remain slippery (see my post). Indecision is causing contagion; contagion is affecting bigger countries, like Italy. And the contagion of Italy threatens to ravage all of the euro zone, including Greece.

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