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Entries in Greek (2)

Monday
Jun202011

Greek Debt Bailout Could Affect US Economy

Comstock Images/Thinkstock(NEW YORK) -- European finance ministers and International Monetary Fund officials met Sunday to discuss a new bailout package for Greece, but there are questions about whether even a second cash infusion in a year will turn the Greek economy around.

There have been violent demonstrations in Athens, protesting government efforts to implement the demands of the country's creditors, which include spending cuts and tax hikes.

While the United States is not a direct participant in the talks, the process is being watched anxiously from Washington, because if Greece does default on its debt, it could have a ripple effect across Europe and the United States.

"We've discovered that the United States is very interconnected with the rest of the globe in the last couple of years," Jon Hilsenrath, the Wall Street Journal's chief economic correspondent, said Sunday on ABC's Good Morning America.  "Our economy is very vulnerable to shocks right now.  It's not like we were in the 1980s and the 2000s when the shocks like Hurricane Katrina or the tech bubble burst and the economy kind of sailed right through."

"What we've seen in the last 12 months with an earthquake in Japan, European financial turmoil last year, that when there are bumps outside of the U.S., it slows us down," he said.  "Our own economy is going through a slowdown right now, so we have to be very attuned to what's happening in the rest of the world."

Greek Prime Minister George Papandreou said that in exchange for another financial aid package, Greece would make rigorous revisions to its constitution.  But it is not clear whether a second rescue package would stop Greece from becoming the next Lehman Brothers, especially since the first rescue package did not work.

"[The bailout] prevents a crisis, a crisis that was staring us in the face last week, from happening.  But it does not solve the underlying problem of too much debt that the Greeks have out there," Hilsenrath said.

"We also have to remember that there are other countries like Portugal, Ireland and Spain that are dealing with similar problems," he said.  "So I certainly think that we should not just discount the possibility that there could be more financial turmoil in the future in Europe that rebounds back to the United States."

Copyright 2011 ABC News Radio

Thursday
Jun162011

Greek Economic Crisis Worries White House

Comstock Images/Thinkstock(WASHINGTON) -- White House and Obama administration officials expressed concern Thursday that European leaders were not acting quickly enough to contain the economic crisis in Greece.

The Greek economic crisis could be a drag on the U.S. economic recovery as it was last year, as well as exacting psychological damage on consumer and market confidence. A further crisis could be a deterrent to economic growth, as have been high energy prices and the disaster in Japan.

Earlier this month during the White House visit of German Chancellor Angela Merkel, the president impressed upon her the need for Europe to act quickly and decisively.

"We think it would be disastrous for us to see an uncontrolled spiral and default in Europe because that could trigger a whole range of other events," he said.

Behind the scenes, administration sources told ABC News, the Obama administration has been pressing Germany not to demand austerity measures of Greece that would be so tough the country could have even more of a challenge recovering than already exists.

The Treasury Department has been pushing French and German banks to recapitalize and to undergo more serious and credible stress tests to show economic markets they can withstand a Greece calamity.

Copyright 2011 ABC News Radio







ABC News Radio