Friday: Greece Formally Requests IMF-EU Bailout; Oil Rig Sinks in Gulf

BY Jeffrey Brown  April 23, 2010 at 9:04 AM EST

Greece protests

A poster next to a National Bank of Greece calls for civil servants to strike against austerity cuts. (Photo by Louisa Gouliamaki/AFP/Getty Images.)

Greece’s national debt crisis reached a tipping point Friday, as its prime minister formally asked the International Monetary Fund and the European Union to save the country’s economy with a financial bailout worth as much as $60 billion.

The request “is a matter of national need,” Prime Minister George Papandreou said in a nationally televised addressed. The nation’s debt crisis sent borrowing costs above 10 percent Thursday. That level is virtually unsustainable, and in his address, Papandreou described the Greek economy as a “sinking ship.”

The bailout, which requires the approval of the IMF board and EU legislators, comes as new data shows Greece’s budget deficit was actually far larger in 2009 than first thought. According to the EU, Greece’s deficit reached 13.6 percent of GDP, revised up from 12.7 percent.

In an interview in March with the NewsHour’s Margaret Warner, Papandreou hinted at what his nation’s debt crisis could mean for the global economy absent aid from other nations. He said:

“If you have one country — even a small country, like a bank, failing in one way or another, creating problems, this would create problems in Europe. …And, on the world currency mark, it could create, for example, a change in parity between the United States and Europe. And this could also affect, for example, the — not only the deficit, but also the growth potential, the export potential of the United States.”

Greece’s call for aid should be a wake-up call for the United States, according to Baseline Scenario: “It is no longer reasonable or responsible to say: ‘U.S. banks have no exposure to Greece.’ U.S. banks are heavily exposed to Europe, and this is turning into a serious Europe-wide problem. The US badly needs to make sure this does not spread beyond Greece.”

The New York Times takes a look at other European nations with problems with credit and debt in this interactive map.

The appeal is also a critical test for the “euro’s stability and European political cohesion,” says Bloomberg News. “At stake is the future of the euro 11 years after its creators gave the European Central Bank responsibility for interest rates while leaving budget policy in national capitals.”

Oil Rig in Gulf of Mexico Sinks

After more than two days of searching, Coast Guard officials are preparing to call off the search for 11 workers missing from an explosion that has sunk a BP oil rig in the Gulf of Mexico.

As the rescue effort nears an end, BP is racing to prevent oil now spewing into the gulf from becoming an environmental disaster.

“With the rig now sunk and the fire out, concerns are now growing that the situation could mirror a deep-water spill caused by a fire on the West Atlas rig off Australia last year, which environmentalists likened to a ‘disaster movie,’” reports the the Christian Science Monitor.

Meantime, the spill is raising new questions about the Obama administration’s plan to expand offshore drilling along the Atlantic and Alaskan coasts, as well as in the Gulf of Mexico.

“If the sunken Deepwater Horizon oil drilling rig were to spew millions of gallons of crude oil into the gulf, the scenes of environmental devastation, combined with the loss of life, could rapidly reverse the confidence drillers have gained with the public in the past few years,” says the New York Times.

Bombings Kill 58 in Baghdad

Multiple bomb blasts across Baghdad have killed at least 58 people and wounded more than 100. The bombings took place around the time of Friday prayers near several Shia mosques in the Iraqi capital. No group has claimed responsibility for the attack, yet officials believe the bombings may be in response to the killings of the top two al-Qaida leaders in Iraq this week.