Home > Man-Made Disasters > Greece Has Days Left Before Bankruptcy

Greece Has Days Left Before Bankruptcy


“Greece has enough money to pay pensions, salaries and bondholders through mid-November, the finance minister said Tuesday, as global markets sank on worries that a messy default could bring down European banks and trigger another global recession.

The Athens stock index was down more than 6 percent by late afternoon while the main Europe markets fell more than 3 percent. The turmoil endangered French-Belgian bank Dexia, whose shares plunged as much as 40 percent, on worries about its exposure to Greek bonds.

Greece had previously said it would start running out of money in mid-October if it didn’t get the next euro8 billion ($11 billion) installment of the euro110 billion rescue package it has been relying on since May 2010.

Evangelos Venizelos sought to reassure Greeks and investors that the country can hold on a little longer while its rescue creditors decide whether to give it more loans.

‘Until mid-November it is clear there will be no problem,’ said Venizelos, upon returning from a eurozone finance ministers’ meeting in Luxembourg.

The worry is that a messy default by Greece — in which sharp losses are imposed with little warning on bondholders, among which are many European banks — would cause massive losses in the financial sector and trigger a credit crunch. That could stifle loans to the real economy, cause huge uncertainty and push the world economy into another recession.” Read more.

Bernanke Warns Recovery ‘Close to Faltering’ – “Europe has a debt crisis. America has a jobs crisis. Corporate profits could be in trouble. World financial markets are in turmoil. And no one seems prepared to ride to the rescue. Federal Reserve Chairman Ben Bernanke bluntly warned Congress on Tuesday of what most of America has sensed for some time: The economic recovery, such as it is, ‘is close to faltering.’ The central bank chief spoke on a day when the stock market spent most of the trading hours in bear market territory — down 20 percent from its most recent highs in April. A late-day rally helped the market finish higher. Bernanke’s exchange with lawmakers seemed to capture the growing belief that no one is prepared to help the global economy in any meaningful way anytime soon.” Read more.

Categories: Man-Made Disasters
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