The Greek Crisis: Behind the Scenes

In Economics, Financials, Politics on February 1, 2010 at 12:40

*It’s been a while since I last posted on this blog due to my busy schedule and the global unfortunate events – apologies to the loyal readers.

Greece has been at the centre of interest the past month on its possibility of defaulting on its national debt and jeopardising the sustainability of the monetary union. Investors have been speculating on that scenario on the Greek equity and debt markets which unavoidably makes an impact on the Euro.

My perception of things is the following. Things are indeed bad for the Greek economy. An above 12 percent of GDP fiscal deficit, over 120 percent debt and reluctant banks to lend money and assist in the recovery of the economy can not describe a prosperous economy. I might say this is the worst economic crisis for Greece since the 1999 stock market bubble. Media have accurately drawn this frame for the state of the Greek economy on that front. But,..

Does this justify the ‘pandemonium’ that is taking pace all over the media and the markets. Is really Greece threatening the monetary union to the extend that ejection should be considered? The answer is NO! With great frustration I have noticed certain British papers devoting great share of their front page on the Greek case, exerting harsh criticism on the government and the EU as a whole. It comes as natural to presume that the ‘Greek debacle’ and its exposure in all media is a product of a Eurosceptic-driven propaganda that aims at hurting the Eurozone and subsequently the Euro.

Markets and media are much smarter than we might think. There never was, nor will be in the the short future a possibility of default of the Greek economy (see Roubini, Krugman), yet some people and institutions fill the market with lies and false impressions in an effort to mislead and manipulate it at their benefit and Eurozones’ expense.

What is more, how come people focus on Greece and not on Spain, as professor Roubini said, which is a much bigger threat to the Eurozone? Is it a matter of who can take more punches on the stomach or a matter of who is easier to manipulate and speculate on? Whatever that might be, certain people are playing dirty games against Greece which happens to be the innocent victim of a market conspiracy. I can’t seem to remember last time David was portrayed as Goliath..

by the Self-Seeker

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  1. Greece has a small market which make it ideal for big funds to speculate with its bond prices..
    EU should impose a number of strict regulations to fight against speculation.South countries fiscal instabilities have already become a broad problem that hurms the whole Union prosperity and credibility..I think it’s high time the EU to take action and reconsider the whole way that monitors its members and push forward brave reformations.
    A succesful union should protect its members when aid is needed while on the other hand it should monitor them to prevent reckless spending and goverment’s profligacy.
    Unfortunately, none of them have been done by EU….

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