Given the absence of serious moves from Europe, anything could set off another bout of international financial contagion
Dow Jones Market Watch is warning of major problems emanating from the Eurozone. This comes amid the latest data from Spain where the economy contracted yet again, this time by 1.7 percent in the second quarter on a year-on-year basis. More problems were reported out of Greece, Italy and Germany.
In an article today, Michael Casey, managing editor for the Americas at DJ FX Trader, said:
“…you’d think the threat of a euro-zone financial meltdown would force policymakers into a tough, unified solution.
“That they’re not doing so is a worry for all of us. In our interconnected global economy, anything could set off another bout of international financial contagion...”
Reuters reported that in Spain, the Eurozone’s fourth largest economy, retail sales dropped for the 36th month running in June, by over five percent year-on-year.
The country’s youth unemployment rate, like Greece’s, hovers around 60 percent, with general jobless rates around 27 percent.
According to Bloomberg, quoting a report from the International Monetary Fund (IMF) Wednesday, Greece is highly unlikely to meet its debt obligations:
“The IMF’s reminder to Europe comes as Greece’s financial fate has become entwined with German politics, with Chancellor Angela Merkel campaigning for a third term on the promise Germany won’t write off any of the loans made to Greece since the debt crisis broke out almost four years ago. Most of Greece’s debt is now held by the Europeans and the IMF after investors took part in the biggest debt restructuring in history last year.”
Outside Europe, Lebanon Opportunities argued on Wednesday:
“Germany is incapable of solving the euro zone’s sovereign debt crisis alone,” underlining the ongoing problems for Chancellor Merkel and other German politicians in underwriting the financial problems of Europe’s south.
Full article: Eurozone on the brink, again — investors, analysts (The Commentator)