The threat from Greece to Europe and the world economy. Your economy.
Leaders of a bunch of the world’s richest countries, the G8, met at Camp David over the weekend. Their number one focus was one of the world’s most dramatically troubled countries at the moment – little Greece. It matters because it’s part of the EU and the euro zone. It’s melting down, and it’s threatening to take the EU with it.
Markets around the world slid in fear last week. A lurch to full-on crisis seems to be happening faster than anyone predicted. The fear is dominoes: Greece, Spain, Italy. And somewhere in that line, the US gets hit too.
This hour, On Point: Euro-crisis.
Howard Schneider, Washington Post financial reporter.
Simon Johnson, professor of entrepreneurship and economics at the M.I.T. Sloan School of Management. Co-author with James Kwak of “White House Burning: The Founding Fathers, Our National Debt, and Why it Matters To You.” He blogs at The Baseline Scenario.
Martin Wolf, chief economics commentator at the Financial Times.
From Tom’s Reading List
Project Syndicate “Postponing the exit after the June election with a new government committed to a variant of the same failed policies (recessionary austerity and structural reforms) will not restore growth and competitiveness.”
Der Spiegel “Recent weeks have been tough on German Chancellor Angela Merkel’s center-right coalition. The already shaky alliance has undergone a series of state election setbacks, the latest of which culminated in Merkel summarily firing her environment minister, Norbert Röttgen, on Wednesday.”
Wall Street Journal “Europe has begun to prepare for Greece’s exit from euro zone ahead elections next month that are fast becoming a referendum on the country’s membership in the common currency.”
Project Syndicate “ The eurozone crisis unfolded primarily as a sovereign-debt crisis mostly on its southern periphery, with interest rates on sovereign bonds at times reaching 6-7% for Italy and Spain, and even higher for other countries. And, because eurozone banks hold a substantial part of their assets in the form of eurozone sovereign bonds, the sovereign-debt crisis became a potential banking crisis, worsened by banks’ other losses, owing, for example, to the collapse of housing prices in Spain.”