The euro crisis can be extended to other countries

The agreement between Paris and Berlin on the participation of private creditors in financial aid for Greece does not end the discussion about the condition of the euro. How real is the threat to other economies?


The share of private creditors in the aid package for Greece could lead to the fact that rating agencies consider a country to be insolvent, said Luxembourg Prime Minister Jean-Claude Junker, told the German newspaper "Süddeutsche Zeitung". Politician warns against entering the euro crisis countries such as Belgium and Italy.

Junker's statement is a response to recent decisions of the Berlin-Paris line. During Friday's meeting in Berlin (17.05) Chancellor Angela Merkel and President Nicolas Sarkozy załagodzili differences in approach to the exit strategy from the crisis in Greece and agreed that the private creditors participated in the struggle with the crisis of the euro only on a voluntary basis.

Today's problems with the euro may have unimaginable consequences for other members of the monetary union. "Fizzle Greece may cause problems in Portugal and Ireland (...) as well as Belgium and Italy" - warns on Junker.

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And indeed - Moody's intends to reduce the rate of credit to Italy. The present note, "Aa2" is unrealistic, the agency announced on Friday evening (18.06) ("Aa2" is the third in the order, the best score of Moody's - ed.). Agency justifies its intentions structural problems of Italian economy, which inhibit the growth of the economy.

And this for years is not a strong point of the Italians. This is the second in the European Union after Greece's economy with the highest level of debt. Currently, debt is 120 percent of GDP. For monetary członkówunii ratio should not exceed 60 percent. In the case of crisis, the third largest national economy Eurostrefy - its costs would be unbearable.

IMF: Greece threatens global economy

According to IMF estimates, a huge debt of Greece may threaten the global economy. As presented in Washington last Friday (17.06) forecast, the IMF notes the growing concern of investors, which has caused problems, the Greek government with the implementation of the necessary procedures to prevent the bankruptcy of the state. "We all knew that recovering from the crisis will require painful changes" - said the IMF chief economist Olivier Blanchard. In his view, the Greek government has to convince the parliament and the citizens that there is practically no alternative. "

You probably need to Athens, next to the currently required 110 billion, another 120 billion. Mutual benefit is there to be subject to restrictions stricter budgetary discipline. Germany guarantees at least one-fifth of each aid package.

On Sunday and Monday the finance ministers of countries of the monetary union will discuss the details. The nearest peak of prime ministers and heads of state of the European Union on Thursday and Friday in Brussels.