Anxiety over the Greek debt crisis spooked markets in Europe and Asia again Thursday as investors worry about problems there spreading. Meanwhile, Greece's prime minister held an emergency Socialist Party meeting but delayed a Cabinet reshuffle until Friday. Daisy McAndrew of Independent Television News reports form London.
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Anxiety over the Greek debt crisis spooked markets in Europe and Asia again today, as investors worried about spreading fallout.
Meanwhile, the embattled Greek prime minister, George Papandreou, held a seven-hour emergency meeting of his Socialist Party. But he delayed a cabinet reshuffle until tomorrow.
We begin with Daisy McAndrew of Independent Television News, reporting from London’s financial center, known as the City.
Another day of protests and political chaos in Athens has pushed the markets back to the brink of panic, as they watched the Greek prime minister fail to control either his people or his parliament.
And with the 96 billion pound bailout money running out, analysts know the chances of some sort of Greek debt default are getting higher every day. And, so, in the City, there are dark mutterings that just as the collapse of the investment bank Lehman Brothers was in 2008, Greece could now be a catalyst for chaos.
NEIL MCKINNON, city analyst:
What the Lehman situation really made clear was that everything depends on everything else. There is no isolation here. Now there’s very similar situation, that this could happen in the Eurozone, and that Greece could actually be the trigger that pulls down the pack of cards elsewhere, particularly for the badly affected countries.
And so European politicians are readying themselves to bail out Greece again. But many say it’s a price worth paying to stop Greece going bust, because the effects of that would be felt throughout Europe, given the number of countries whose banks act as creditors.
French banks are the most at risk with 33 billion pounds of Greek debt. Germany is next with 21 billion pounds. And British banks have eight billion pounds worth.
And market analysts know that might not even be an end to it.
KATHLEEN BROOKS, Forex.com:
If we see Greece go, and if that pushes contagion effect into Spain, then that is when will are going to have the big problems, because then it’s going to look like actually maybe Germany won’t even be able to afford to bail these countries out. And it won’t just be Spain. Maybe then the focus will go to Italy, maybe then to France. And when you get to that stage that has to be the end of the euro.