Growing Fears for Greek Exit of the Euro

The office of Greek President Karolos Papoulias has announced that his country will be forced to hold a second general election after the parties failed to agree on a plan to enter a coalition. Talks are currently being held in Athens to form an interim caretaker Government until the next vote likely to be held in the middle of next month.

Fears are growing across the Euro zone that the Greeks will be forced out of the euro following the increasing lack of stability in their political class. There is also an expectation that it will be the extreme-left parties that will benefit most from the forthcoming elections following 5 years of harsh austerity and rising unemployment. . These parties have to various degrees been threatening to undermine the austerity model imposed by the EU and IMF under the terms of the country's bail outs. The election of such leaders and subsequent disputes with the EU could likely precipitate a withdrawal of Greece from the Euro.

Ireland's Economic Meltdown

While I was away from the site the major story making the headlines here in Ireland was the effective implosion of the Irish economy. For those of you who weren't following the story Ireland became the first country to enter recession in the Eurozone in September 2008 and it is suspected to be the last to come out of it.

The crisis came about as a mixture of a number of factors. The housing market in Ireland was big business for a number of years, with prices rising rapidly and the construction sector employing an eight of the entire population. Owing to the global economic slowdown of late 2008 the property bubble in Ireland burst and by the middle of 2010 house prices had plummeted 35% compared with the second quarter of 2007. Therefore the construction sector was also mortally wounded creating waves of unemployment and mass emigration. The pressure greater unemployment put on Government funds added to the national debt already soaring.

The G20 Guide

In the past few days the G-20 summit has been taking place in Toronto, Canada. It is a meeting of the Finance Ministers and central bank Governors of 19 prominent world Economies plus the EU. Of course many heads of State also attend the Summit which has grown is status significantly in the past few years.They have been held bi-annually. However, 2011 they are scheduled to be convened on an annual basis. The next meeting of the group will take place in South Korea in November. The first meeting of the group took place in 1999. Although some members such as the UK, France and Italy are represented as part of the EU contingent they do also send their own contingents to the meetings.