Monday, May 23, 2011

Euro Falls, Wall Street Drops as Spain, Italy Turn Backs on Greece

May 23, 2011 - As the Greek debt crisis continues to linger, one of Europe's other debt "PIGS" has shown the chutzpah to lecture Greece. Spain is one of the "PIGS" (Portugal, Ireland, Greece, Spain) that threaten to drag the euro and Europe into the slop of a worsening recession. Without drastic action, the PIGS of the eurozone seem doomed. The New York Times has a good article about the Greek economic tragedy today that says, "When Greece’s financial decision makers were summoned to secret talks at a Luxembourg castle by their euro zone partners this month, they knew a tongue-lashing was coming over the country’s stumbling reform efforts." Greece deserves that tongue-lashing, but the Times went on to note that, "What they did not expect was that it would be Spain and Italy, as opposed to Germany, that would take the lead in upbraiding Greece for not pushing faster on privatization and tax overhauls." Reuters-Africa reports that Wall Street's bad day today was due largely to fears over the fate of the sickly euro. Greece's credit rating was lowered by Fitch Ratings last Friday, which gave Wall Street an entire weekend of angst before they acted out today. None of this is helping investors' confidence. The Wall Street Journal reports today that stock market's volatility index "rose to its highest level in two months on Monday as investor concern over the worsening European debt crisis carried over to U.S. markets and drove stocks down."