Greece is expected to report as early as this weekend, and/or latest by end of the month, being unable to meet EU set forth austerity measures amid worsening conditions. Additionally, the private sector was expected to play an important role buying government debt in exchange for credit. That did not happen and Greece is sliding ever more into darkness and default on its debt.
In a cause and effect theory- the European Central Bank – is expected to withhold further Greek loans out of a second tranche of EU credit. And like falling dominos, after Greece, all eyes will be on Ireland, subsequent Portugal, Italy and Spain.
Although, the German chancellor wants Greece to remain in the EU, Greece has no choice than leaving the EU, other EU member will force the German chancellor’s hand. The effect will be the emergence of a smaller, but more stable EU. As for Greece, the country will probably re-invent the Drachme.
The unknown at this time, is the exact amount of Euro billions, European banks loaned Greece? Thereafter, is the amount of investments our banks tied up in the European banks? Let the dominos fall where they may. No one really knows what will happen, and to what extend a European debt crisis will spread to the U.S? For certain, lying ahead is a very unstable market, with a distinct possibly, another U.S. bank bailout may occur (using public money). We happen to live in an intertwined world.