Home > Man-Made Disasters > Global Markets Tumble as Greece Announces Referendum on Euro Bail-Out, New Recession ‘Will Lead to Civil Unrest Worldwide’

Global Markets Tumble as Greece Announces Referendum on Euro Bail-Out, New Recession ‘Will Lead to Civil Unrest Worldwide’

By Nicholas Cecil – “The world is on the brink of a new jobs recession which could spark social unrest in dozens of countries, a report warned today.

The grim warning from the International Labour Organisation came as leaders of the G20 rich nations prepared to meet for a crisis summit in Cannes this week.

‘We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment,’ said Raymond Torres, director of the ILO’s International Institute for Labour Studies.

In 45 out of 118 countries examined, the risk of social unrest is rising, according to the World of Work Report 2011.

It will take at least five years for employment in advanced economies to return to pre-crisis levels, it added.

Fears of another recession grew today as a leading think tank slashed its eurozone growth forecast. The OECD predicted that the single currency area will almost come to a halt next year, with growth of 0.3 per cent. A slowdown would hit Britain’s economic prospects.” Read more.

Greek govt ‘on verge of imploding’ – “Greece’s government looked on the verge of implosion on Tuesday ahead of a Friday confidence vote as a socialist deputy defected and another cadre called for early elections after the prime minister called a referendum on his EU debt rescue. Greek Prime Minister George Papandreou called the referendum late Monday in a bid to secure approval of his disputed economic policies without early elections. But the gambit backfired when a former deputy minister defected, reducing the ruling party’s majority in the 300-seat parliament to 152 deputies.” Read more.

Global markets fall as Greece announces referendum on euro bail-out – “Global stock markets dropped sharply as investors sold off shares after Greece’s shock decision to hold a referendum on its eurozone bail-out package thratened to intensify the region’s debt crisis. London’s FTSE 100 index of leading shares dropped more that 2pc, with markets in Germany falling, France, Spain and Italy sliding between 2.7pc and 4pc. Andrew Lim, banking analyst at Espirito Santo in London, said: ‘If Greek voters reject the unpopular bailout plan it could result in a ‘hard default’, which could force banks to take losses of about 75pc on their Greek sovereign bonds, trigger payouts on credit default swap insurance contracts, and raise the threat of a systemic risk. ‘If we get a hard default in Greece, it will exacerbate the situation with Italy and Spain. It just increases the problem of Italy going down the same route, and that’s the real risk.'” Read more.

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