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Fri February 10, 2012
Stocks Take Dive, As Greek Bailout Deal Remains Uncertain
Just a day after it appeared that Greece and its eurozone partners had reached a deal, we're back where we've been for months: There are fiery protests on the streets of Athens, the markets and the euro are in turmoil and negotiations are at a tense point with four Greek Cabinet ministers tendering resignations over their opposition to austerity measures.
Here's the how the AP rounds up the latest:
"Investors had breathed a sigh of relief Thursday after Greek Prime Minister Lucas Papademos and the heads of the three parties backing his government agreed to private sector wage cuts, civil service layoffs and cuts in government spending.
"But finance ministers from the other 16 countries that use the euro insisted that Greece save an extra euro325 million ($430 million), pass the cuts through parliament and guarantee that they will be enforced after planned elections in April.
At stake is whether Greece will receive another round of international bailout money. If it doesn't, analysts expect the country will default on its debt and that could send shock waves across the world.
As the Financial Times puts it, the extra 325 million euros, put off George Karatzaferis, "head of the LAOS party — a far-right minority member of the unity government." Three of the party's Cabinet members offered their resignations and according to The Guardian, which is live-blogging the situation, Deputy Foreign Minister Mariliza Xenogiannakopoulou has also resigned.
The threat of austerity measures also led the country's two biggest trade unions to call for a 48-hour strike, which shutdown government offices, schools and publish transport, among other things today.
The FT sets the scene in Athens:
"A battery of loudspeakers outside the finance ministry urged: 'Rebel now, keep striking, don't give in,' as protesters streamed into central Syntagma square.
"'We don't have much more to lose,' said Stavros, a 28-year-old architect as he sprayed graffiti on a shuttered department store. 'Six years studying, another doing military service and no chance of a job ... What can you expect?'"
The Guardian reports that all this turmoil will ultimately come to a head on Sunday, when the Greek parliament votes on whether to accept the austerity measures.
Meanwhile, partially on the Greek news, the Dow is down 1 percent, with the Nasdaq and S&P in similarly negative territory.