News / Europe

Clashes in Athens As Europe Fears Looming Bank Crisis

Protesters shout slogans during demonstration in Athens, Oct. 5, 2011.
Protesters shout slogans during demonstration in Athens, Oct. 5, 2011.
Henry Ridgwell

Protesters and police have clashed in the Greek capital Athens following a protest march against the government’s latest round of austerity measures. European governments fear the Greek debt could create huge losses for banks across the continent - raising fears of another credit freeze and banking crisis.

A demonstration against the Greek government’s latest toughening of austerity measures turned violent as masked youths hurled rocks and Molotov cocktails at security forces; they responded with tear gas and baton charges.

At one point protesters ran into the subway but were forced out as police fired tear gas into the station.

Earlier thousands of demonstrators marched peacefully against the government cuts, bearing placards saying "Erase the Debt" and "The rich must pay."

Stavroula Brisini who works at the National Statistics Service was among them.

He says, "Wage earners and pensioners cannot pay for the crisis in such a barbaric way, consistently, while others engage in tax evasion. They should be collecting funds from others. Instead,” he says, “wage earners, pensioners and civil servants always carry the burden."

Public workers staged a 24-hour strike against plans to raise income taxes, prolong a property tax and force more redundancies to shrink the public sector.

But inspectors from the so-called troika of the IMF, the EU and the European Central Bank say such measures are vital if Greece is to receive further installments of the 109 billion euro bailout agreed in July.

"It will certainly be increasingly difficult for the Greek government to sustain all of the pressure," says Tobias Blattner, a European economist with Daiwa Capital Markets in London. "But so far I think the Greek Prime Minister Papandreo has managed to push all the reforms through parliament so I think he will stay in power unless there is something major happening, which for example could be that the next tranche will not be paid out for Greece, but I think this is really unlikely.”

In recent days leaders across Europe have warned the continuing debt crisis in Greece threatens to bring down the euro itself.

Belgium and France were forced to come to the rescue of Belgian bank Dexia Tuesday, after its share price plunged 38 percent over worries that its exposure to Greek debt would leave it unable to borrow money.

It is the first state rescue for a European bank in the eurozone debt crisis.

Greece’s announcement this week that it would miss its 2011 deficit target has raised the prospect that the terms of the huge bailout - the second in two years - will have to be renegotiated, with an effective default on some of the debt.

That could mean bigger losses for European banks.

"The only solution would be that private bond holders will have to take a bigger hit on the debts that they own in Greece," says European economist Tobias Blattner. "Economists would always argue that you need at least something like 50 percent. More probably you would need even 60 percent so that Greece could return in the medium term to a sustainable fiscal position. But politicians are unlikely to agree on such a big haircut simply because it would cause another big financial turmoil."

Economists say the biggest fear then would be a return to the credit crunch conditions that preceded the global crash just three years ago.


You May Like

VOA Exclusive: Interview With Myanmar President Thein Sein

Thein Sein calls allegations that minority Muslim Rohingya are fleeing alleged torture in Rakhine state a media fabrication More

New Yellow Fever Research May Lead to Improved Treatment

Researchers identify features of disease that may lead to more effective treatment More

UN Rights Commission Investigates Eritrea

Three-member commission will start collecting first-hand information from victims and other witnesses in Switzerland and Italy next week More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ebola Economic Toll Stirs W. Africa Food Security Concernsi
X
November 19, 2014 11:39 PM
The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.
Video

Video What Jon Stewart Learned About Iran From 'Rosewater'

Jon Stewart, host of the satirical news program "The Daily Show" talks with Saman Arbabi of Voice of America's Persian service about Stewart's directorial debut, "Rosewater."
Video

Video Lebanese Winemakers Thrive Despite War Next Door

In some of the most volatile parts of Lebanon, where a constant flow of refugees crosses the border from Syria, one industry continues to flourish against the odds. Lebanese winemakers say after surviving a brutal civil war in the 1970s and 80s, they can survive anything. Heather Murdock has more for VOA from the Bekaa Valley in Lebanon.
Video

Video China's Rise Closely Watched

China’s role as APEC host this week allowed a rare opportunity for Beijing to showcase its vision for the global economy and the region. But as China’s stature grows, so have tensions with other countries, including the United States. VOA’s Bill Ide in Beijing reports on how China’s rise as a global power is seen among Chinese and Americans.

All About America

AppleAndroid