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Question of the Day
What investors worldwide don’t want happening is other European countries following in the footsteps of Greece.
“Greece, in terms of its debt, is not that large,” Mr. Workman explained. “The real concern is to not open the door to other countries sort of throwing up their hands and saying, ‘Hey, if you bailed out Greece, bail us out, too.’ “
While Portugal’s $225 billion debt and Ireland’s $207 billion debt also are concerns, the real fear is possible defaults by Italy and Spain, both much larger economies and both in much deeper debt - $2.58 trillion and $894 billion, respectively.
“They can’t just open the door to everyone,” Mr. Workman said. “They have to limit it to the neediest of needy.”
There are still political barriers too, as the deals require European leaders to make unpopular austerity moves in democratic countries.
“We found a good overall package for the next stage, but I think that we still have many more stages to go,” German Chancellor Angela Merkel told reporters in Berlin.
While Greek Prime Minister George Papandreou said the deal meant “a burden from the past has gone,” his left-wing opposition denounced the deal as imposing years of hardship.
Emerging economic giant China also warned that its huge reserves did not impose any burden on it. “Emerging economies should not be seen as the EU’s good Samaritans - in the end the EU has to pull itself out of the crisis,” the official Xinhua News Agency said.
Nevertheless, world markets responded positively, with European markets making the biggest gains. The Euro Stoxx 50 index soared more than 5 percent while the FTSE 100 index in London ticked up 2.5 percent.
Canadian markets also enjoyed a day of market increases. The S&P/TSX composite index was up 215.35 points to 12,401.41, while the TSX Venture Exchange gained 30.07 points to 1,600.86. Asian markets noticed similar gains. In Tokyo, the Nikkei 225 index gained 2 percent, while Hong Kong’s Hang Seng index was up 3.3 percent.
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About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
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