World markets plunge, bank lines grow as Greece financial crisis deepens

29 Jun 2015 | Author: | No comments yet »

No Greek tragedy for Australia.

The fact that both countries are part of global debt and equity markets means that we get caught up in the contagion effect to some degree – hence local shares fell on Monday by more than 2 per cent as a generalised hysteria hit most stock markets.Samaras, who lost elections to Tsipras in January, echoed warnings made by a European leaders that a “No” vote would lead to the country’s exit from the euro. Major markets in Europe took a battering following news over the weekend that Greece’s eurozone partners refused to extend the country’s bailout program.

World markets will remain skittish until there is some certainty on what happens in Greece, and this means we will retain a seat on the markets rollercoaster ride. The spectre of Greek mums and dads unable to access their bank accounts, and long queues outside ATMs, is a scary graphic but Greece’s problems will not lead to a worldwide financial armageddon. If you want to stay in the euro, keep banks open, back Europe, vote Yes, otherwise cast a No ballot.” Merkel said Monday that “we have to be very cautious about what messages we are sending.” She says nearly all governments have a similar position on creditors’ offer to Greece and there’s been no change in that.

The outcome of this week’s game of chicken between the Greek government and other European governments, Europe’s central bank and the International Monetary Fund won’t have a significant impact on the Australian economy. Greece’s Culture Ministry has announced that individuals and tour groups visiting the Acropolis will be able to pay for their tickets by credit card from now on. History has shown during the past six years that debt-laden European economies that have been on the brink of default and whose membership of the European Union has been under threat have seen their various crises averted. The latest drama emerged because Greek Prime Minister Alexis Tsipras moved the goal posts on Friday by announcing he would leave it to the Greek people to vote on whether they would accept the austerity-heavy bailout package on offer.

NO DEAL: Sysco said it scrapped a proposed $3.5 billion buyout of US Foods after the Federal Trade Commission blocked the deal to combine the two food-service companies. There is plenty of tough talk from the European lenders and the IMF about an act of default leading to an end to providing Greece with financial assistance. All must understand this.” “We wish and hope that all political forces will assume their responsibilities, restoring the country as quickly as possible to normality and stability, which are absolutely essential requirements to protect Greek tourism and to support one more time the national recovery effort of the Greek economy.” The hotel association says it is working with other tourist industry bodies to “safeguard the country’s international image and to deal with any instances of exploitation of the current situation.” The Athens Stock Exchange is closed all week, but the country’s government borrowing rates in bond markets are taking a pounding as uncertainty over Greece’s future hit markets worldwide.

The FTC argued that the merger it would reduce competition by putting three-quarters of U.S. market for restaurant suppliers under the control of one company. Germany is owed €57 billion, France €43 billion, Italy €38 billion and Spain €25 billion – on top of those countries’ contributions to the IMF loans.

But as AMP economist Shane Oliver points out, even the weaker economies within the EU have become stronger in recent years and many have been removed from life support thanks to getting their economic health in order. BONDS, DOLLARS: U.S. government bond prices jumped, sending the yield on the 10-year Treasury note down to 2.39 percent from 2.47 percent late Friday.

There is less toxic debt in Europe than there was a few years ago, in part because the European Central Bank’s quantitative easing measures have been soaking up European government bonds. The official says Tsipras told Juncker that preventing the Greek people’s democratic expression by shutting down the banks is not within Europe’s democratic tradition. Thus, there are plenty of compelling reasons for all parties to work out a solution and there would be very few parties (other than the Greek government) that would want to see a true default and a Grexit. And even though a Greece secession from the EU would be painful, it might at least bring to a close the drawn-out negotiations, which have been going on since 2010. European Commission President Jean-Claude Juncker says he feels betrayed by Greek Prime Minister’s Alexis Tsipras suprise call for referendum last weekend and says that “playing one democracy against 18 others is not an attitude worthy of the great Greek nation.” After months of good relations with Tsipras as the bailout negotiations dragged on, Juncker turned against the Greek leader on Monday, complaining that “egotism, tactical games, populist games” took over from cool-headed economic analysis.

She added: “If this ability to find compromises is lost, then Europe is lost, and that’s the sense in which the sentence I have often said should be understood: ‘if the euro fails, Europe fails.'” Merkel said five years of crisis-fighting efforts have strengthened Europe. She said: “Europe can cope much, much better with crisis situations such as we have in connection with Greece because we have achieved a lot together.” Transport Minister Christos Spirtzis says fares in greater Athens for the capital’s metro, tram, bus and trolley-bus services will be scrapped effective Monday.

Luis de Guindos said economic contagion is much less likely to happen now than it was in 2011 and in 2012, when many feared a Greek economic implosion could destabilize Spain financially. He added: “it is hard to calculate the indirect consequences, on the countries of the eurozone, the financial markets and economic expectations in Europe.” Macedonia’s central bank says it has taken “protective” measures to limit outflows of money to neighboring Greece, which has itself limited money withdrawals and transfers. France’s finance minister says this week marks a moment of truth for both Greece and Europe but that talks can resume anytime as a Tuesday deadline looms for a bailout program. Michel Sapin told France-Inter radio that “Greece is trapped by reality, by hard reality” as the Paris Bourse dropped more than 4 percent at opening Monday.

Pierre Moscovici, the European commissioner for economic affairs, said negotiations were cut off when an agreement seemed within reach, and he said now the situation largely rests on a ‘yes’ vote in Greece.

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