News / Economy

World Markets on Edge as Greece Misses Deficit Reduction Target

U.S. stocks followed European and Asian markets into the red on Monday after Greece announced it will miss deficit reduction targets worked out in a bailout deal with lenders.  Despite a series of austerity measures, the Greek government projects its deficit at 8.5 percent of the country's economic output, well above the 7.6 percent target it had promised international creditors. The admission renews fears that Greece may not get the crucial assistance it needs to avoid default.

The possibility that Greece will not make good on its debts moved a step closer to reality on Monday.  At a eurozone finance ministers meeting in Luxembourg, EU Monetary Affairs Commissioner Olli Rehn said Greece and the 17 nations that use the euro have reached a critical juncture.

"It seems that Greece is likely to miss the target this year, next year and concrete measures agreed to so far are going a long way to meet all the fiscal targets," said Rehn. "As I said, it is essential now that we will assess the measures, we will review the figures."

Greece's next bailout installment - about $11 billion - is predicated on the country's ability to reduce spending - spending that has raised the country's debt load to a staggering 173 percent of national income.  Without the next installment, Greece is expected to run out of money in a matter of weeks.  

David Jones is a market strategist at IG index:

"The concern is that there's an awful lot of talk from politicians and central banks to an extent and very little in the way of immediate action," said Jones. "So I think the worry is that once again this latest problem will extend just how long this takes to try to solve."

Greece has imposed a series of unpopular austerity measures that have led to almost daily protests from workers weary of deep pay cuts and higher taxes.
But Nikos Christodoulou at Merit Securities says it is no secret why Greece has been unable to reach its target goals.

"The main reason is the recession," said Christodoulou. "The recession widens in Greece at this moment. We know that it will be at least 5.5 percent for this year and we may have a new recession in the next year.  So the bigger the recession, the higher the budget deficit."

Some analysts accuse the European Union, the IMF and the European central bank of creating unnecessary drama. Even so, Oliver Roth at Close Brothers Seydler Bank says it's unlikely the so-called "Troika" will allow Greece to fail.

"For me, it is clear that the Troika will pay sooner or later the credits to Greece and therefore I don't think there is a reason for being so negative," said Roth.

Experts say pulling the plug on Greece could have massive repercussions in Europe, especially to French banks with heavy exposure to Greek debt. Some say the resulting crisis could plunge the global economy into another painful recession.

You May Like

How to Safeguard Your Mobile Privacy

As the digital world becomes more mobile, so too do concerns about eroding privacy and increased hacking More

'Desert Dancer' Chronicles Iranian Underground Dance Troupe

Film by Richard Raymond is based on true story of Afshin Ghaffarian and his friends More

Researcher: Obesity Poses Complex Problem

Professor at Symposium on Obesity, Diabetes and Metabolic Syndrome says problem involves more than calorie intake, warns of worldwide health impact 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.
Scientists Say Plankton More Important Than Previously Thoughti
X
George Putic
May 26, 2015 9:26 PM
Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.
Video

Video On Film: How Dance Defies Iran's Political Oppression

'Desert Dancer' by filmmaker Richard Raymond is based on the true story of a group of young Iranians, who form an underground dance troupe in the Islamic Republic of Iran. This is the latest in a genre of films that focus on dance as a form of freedom of expression against political oppression and social injustice. VOA’s Penelope Poulou has more.
Video

Video Turkey's Ruling Party Trying to Lure Voters in Opposition Stronghold

Turkey’s AK (Justice and Development) Party is seeking a fourth successive general election victory, with the goal of securing two-thirds of the seats in Parliament to rewrite the constitution and change the country's parliamentary system into a presidential one. To achieve that, the party will need to win seats in opposition strongholds like the western city of Izmir. Dorian Jones reports.
Video

Video Millions Flock to Ethiopia Polls

Millions of Ethiopians cast their votes Sunday in the first national election since the 2012 death of longtime leader Meles Zenawi. Mr. Meles' party, the Ethiopian People's Revolutionary Democratic Front, is almost certain of victory again. VOA's Anita Powell reports from Addis Ababa.

VOA Blogs

World Currencies

EUR
USD
0.9152
JPY
USD
122.70
GBP
USD
0.6494
CAD
USD
1.2374
INR
USD
63.925

Rates may not be current.