EU DEBT CRISIS April 8, 2011Posted by wmmbb in European Politics.
Portugal has now asked effectively France and Germany to bail it out of its sovereign debt crisis. Other reports suggest that Spain has found itself in the same position.
Deutche Wella reports:
European finance ministers were due to meet on Thursday for a relatively pressure-free discussion on the future of the fiscally challenged eurozone. But plans for relaxed talks were derailed after Portugal announced it would become the third EU member, after Greece and Ireland, to seek financial help.
Emergency bailout talks will now be the focus of the meeting, superseding the proposed analysis of Greece’s ongoing budget problems and debate about repayment terms for Ireland, which sought financial help late last year.
Ministers face the difficult task of assessing how to appease unforgiving markets following this latest economic blow.
The report suggests that a domino effect was feared:
Many still have their eyes on Spain, the next EU country widely tipped to require financial assistance, although Spain has insisted that it will not be the next in line to receive an EU bailout.
“Spain is not at risk at all after Portugal has asked for a rescue,” Finance Minister Elena Salgado told Spanish National Radio (RNE) on Thursday.
She added that the Spanish economy was “distinct” from Portugal’s as it is “larger, more diversified and more productive.”
Spain has adopted a policy of stringent budget cuts and labor, pension and banking reforms in order to avert the threat of becoming the fourth eurozone domino to topple.
What happens when France and Germany decide that it all too much?
( I expect to quote follow-up reports)
Markets are social institutions. They rest on cultural and other assumptions. David Korten suggests that “greed is not a virtue”.