Greek Crisis Is Just Beginning
Today former European Comission President Romano Prodi said that the Greece crisis is "completely over." This may be the best indicator that the Greek Crisis is only just beginning.
“For Greece, the problem is completely over,” said Prodi, who was also Italian prime minister, in an interview in Shanghai today. “I don’t see any other case now in Europe. I don’t think there is any reason to think the euro system will collapse or will suffer greatly because of Greece.”
In previous articles I have mentioned that one thing we can be sure of is lots of hand waving and talk, but not necessarily a lot of action. This seems to be hand waving and an attempt to boost confidence. Unfortunately for Greece, it's problems persist no matter how much confidence people have that they don't. Years of too much spending combined with pension guarantees and citizens taxed to the hilt cannot be remedied by confidence alone. Greece is going to face tough times, and it's hard to imagine that the worst is behind Greece.
Intervention by European nations to date “was enough” and countries such as Spain and Portugal have “plenty of time” to get their finances in order, said Prodi.
What intervention by European nations? Talk? Has any real help other than "moral support" and talk of potential aid really been extended? Germany's Chancellor, Angele Merkel, has repeatedly refused any financial aid to Greece, and with good reason! German's don't need to bail out the Greeks, and if they do, you can bet Spain, Italy, and others will try to jump on board.
Prodi says these countries have "plenty of time," and time is definitely one thing that Greece and other countries do have, I think its just a matter of how good that time will be. Time is what it is going to take to resolve these issuesn the meantime it probably won't be a pretty picture for the economies of these countries, nor of the Eurozone.