Like the ancient Acropolis, Greece's current economy is in ruin. (Photo Credit: CC BY/*clarity*/Fotopedia)

Greece is quickly sliding toward third-world status as austerity measures drive citizens to riot. The International Monetary Fund is concerned that if Greece defaults on its multi-billion dollar debt, the cost to the Eurozone will be tremendous, sending other teetering nations over the edge, reports the Washington Post.

Europe fears Grecian formula

Flagging support for the euro and rampant unemployment has made recovery difficult for numerous Eurozone countries. Continuing to funnel billions of dollars into Greece would be a crushing financial blow to Europe, argued the IMF. In spite of austerity plans in place across the Eurozone, which include unpopular measures like cutting funding for public programs and public employees, signs of recovery have remained elusive. Similar sluggish returns in the U.S. and Japan have damaged the global economy. For Greece to receive any more aid money, the IMF is requiring that the nation follow severe cutback plans to the letter.

“We have entered into a new phase of the crisis that I would term the political phase, where hard political decisions need to be made because the window for substantial policy action is closing. Time is of the essence,” said IMF financial counselor Jose Vinals.

Papandreou hanging on by his fingernails

Amid the chaos of Greece’s slide – it has the lowest credit rating of any developed nation on Earth, according to Standard & Poor’s – Prime Minister George Papandreou attempted to assemble a new cabinet in order to maintain political control. He has announced that he will replace finance minister George Papaconstantinou, who was the face of the government’s austerity plan, with defense minister Evangelos Venizelors. Numerous sources compare such moves to shuffling the deck chairs on the Titanic.

The Wall Street Journal noted that not all the news surrounding Greece and the economy is bad news. German Chancellor Angela Merkel and French President Nicolas Sarkozy have announced their nations have reached agreement regarding a Greek bailout package that has been called the “Vienna Initiative.”

Greek riots intensify as credit collapses

Tens of thousands of protesters blocked Athens’ Syntagma Square Wednesday in effort to pressure Greek Parliament into rejecting the latest austerity measure proposal. If the plan passes, it is believed that it will only provide a short-term fix, as Greece is currently not selling long-term bonds and is depending solely upon emergency installment loans. With Greece’s CCC national credit rating, the interest rates demanded by investors are tremendous.

“There is very little way that Greece can pay back the debt,” said Jonathan Tepper of London economic research group Variant Perception.

Is the US like Greece?

Financial doomsday cultists like to say that the U.S. should watch its p’s and q’s, lest it fall into the same social welfare/entitlement trap that has nearly consumed Greece. The U.S. has a much larger, more diverse economy than Greece, which means that the fall would take much longer. Yet a weak U.S. dollar could hasten the process, resulting in a credit downgrade.

Greece’s credit rating is world’s lowest

Sources

CNN Money

Wall Street Journal

Washington Post

Some European financial experts believe the euro will collapse. (Photo Credit: CC BY/E. Robert Vicol/Flickr)

Much like the United States, the European Union has been living in an economic dream world where moral hazard does not exist, says Roger Cohen in a recent New York Times op-ed piece. A lack of financial oversight is in large part why countries such as Ireland, Greece, Portugal and Spain are on the precipice of financial disaster, and European Union bailouts have achieved the illusion of short-term stability. Like many Europeans, Cohen wonders where the next bailout will come from – and whether German Chancellor Angela Merkel is willing to put her money where her mouth is when it comes to propping up the euro.

Germany supports the euro, but aren’t doing enough to save it

Angela Merkel once said that “If the euro fails, then Europe fails.” When Germany re-unified, it gave up the Deutsche Mark for the euro as a condition (“a Faustian bargain,” writes Cohen), so Berlin would appear to be invested in the euro’s success. Of late, as the financial foundation of the European Union has begun to show cracks, Merkel has reportedly done more finger-pointing than taking responsibility for the European Union’s future. She says she wants a euro zone 2.0 by 2013, a fiscal union in which the individual European states and shareholders follow strict financial guidelines or face severe punishment. But when it comes to the real sacrifice needed in the short term, Merkel has had little or nothing to say, writes Cohen.

‘Will we have to pay for all of Europe?’

The German tabloid Bild has mocked what it refers to as Chancellor Merkel’s hollow pronouncements. Germany’s pledge to hold to the ideals of a unified Europe has given way to condemnation of “euro zone sinners” whose rampant, largely unrestrained speculation has led the European Union to the edge of a canyon. Unless Germany consumes more, complains less and brings creative invention to solving the European economic crisis, Cohen suggests that more euro zone defaults will occur, and the nations with the most financial trouble will be set adrift. Angela Merkel and Germany must honor commitments and stand by the kind of tough decisions all leaders in the European Union must now make.

Sources

New York Times

The European Union is ‘broken’

Nicolas Sarkozy and Angela Merkel are making friends and seeking an alliance with Russia. (Photo Credit: CC BY-SA/Pimkie/Flickr)

Europe is searching for ways to piece together a lasting model for economic prosperity and national security. According to the Atlantic Sentinel, Angela Merkel, Nicolas Sarkozy and Dmitry Medvedev are meeting before the upcoming European G20 meeting in order to cement what could be a lasting partnership that would signify a “new Atlantic order.” No final decisions are expected to be reached during the two-day meeting at the Normandy resort of Deauville, as German Chancellor Merkel and French President Sarkozy don’t want to be seen as bypassing the European Union.

Merkel and Sarkozy negotiating post-Cold War detente with Russia

Merkel and Sarkozy recognize that Russia is on edge over NATO’s expansion into Central Europe. Their talk with Russian President Medvedev will focus on how they can work together to secure their alliance in a fast-changing European theater. As Merkel put it, “We will discuss whether it is possible for Russia and NATO to cooperate better because the era of the Cold War is definitely over.” Sarkozy wants to work with Russia as an ally rather than an adversary. The development of an economic and security partnership would ideally bring Russia closer to the European Union.

Financial regulation on the G20 table

In light of the global economic collapse, Merkel and Sarkozy are pushing stricter financial regulation at every opportunity. The establishment of a permanent financial watchdog for the European Union has been discussed. Recent struggles with China over the communist nation’s fortuitous currency manipulation have emboldened Merkel and Sarkozy’s efforts. Chinese Premier Wen Jiabao has argued before the European Union that the European alliance should not buy into what are largely American claims that the yuan should be allowed to quickly appreciate.

The U.S. wants a piece

The United States’ reaction to Merkel and Sarkozy cozying up to Medvedev has been negative. As the Obama administration hasn’t allocated may resources to pursuing stronger ties with Europe of late, there is fear that a Germany-France-Russia alliance could leave America in the dust. U.S. Officials would like all discussion to be saved for the G20 conference, where the U.S. will have a role. Considering that Russia’s relations with the U.S. have been less than favorable because of U.S. sanctions against Iran, the odds appear stacked against Obama and company.

Sources

Atlantic Sentinel

The European G20 didn’t produce desired results in 2009

Greek riots in Athens have left three dead. Image from Wikimedia Commons.

The city of Athens has been shocked by a violent outbreak of Greek riots in which three have been left dead as protesters and police clash.  The Greek riots are believed to be caused by recent economic measures meant by the Greek government to curb spending and gain a better grip on the country’s spending ahead of a pending bailout. However, Greece is likely to have pressure to get things in order before the country can get any quick cash in a bailout.

Greek riots touched off by austerity measures

The Greek riots began after a Sunday announcement by Prime Minister George Papandreoun which outlined a spending bill aimed at tightening the nation’s belt. The budget deficits and financial turmoil have led to the downgrade of the credit rating of Greece.  The proposed spending agenda would cut 30 billion euros over the next few years.  According to MarketWatch, the cuts would amount to about 11 percent of Greece’s gross domestic product.

What’s getting cut?

About 75 percent of total public spending in Greece goes to pensions and public sector wages.  More people are employed in the public sector in Greece than by most other European governments. As well as cuts to wages and pensions, an increased value added tax on consumer goods such as alcohol and cigarettes is also included.

The Bailout

In order to keep Greece from becoming insolvent as a nation, a 110 billion Euro Greece bailout is being put together by various European Union nations and the International Monetary Fund.  Germany is one of the chief contributors, and  Chancellor Angela Merkel has pledged 22 billion euros. However, she has been hesitant, saying that immediate aid would have gone to waste before reforms were made.  The bailout is unpopular with the German public, though the President of the Bundesbank (central bank of Germany, similar to the Federal Reserve) Axel Weber has supported the bailout, as not doing so could contaminate other European markets.

Greek riots preceded by strikes

After the Prime Minister announced his proposed budget revisions, which are expected to easily pass as his party (Socialist) holds a 160-seat majority, a nationwide general strike began in protest of the cuts, according to the Wall Street Journal. No ferries ran, schools closed, shopkeepers locked their doors, lawyers and doctors all took to the streets in protest. Hospitals were barely able to operate, and no flights went in or out of the country before the Greek riots began.  Further protests are due to take place.

(Photo: commons.wikimedia.org)

It’s time for Forbes‘ list of the world’s 100 most powerful women. These are women who have achieved great things in the public and the private sector. They’ve made contributions to society that will not be forgotten, and as a result they’ve garnered no small amount of fame. If I can in any way parlay the glow of their accomplishments into hawking auto loans and the best payday loans on the World Wide Web, I’ll be very happy. Please apply here by clicking the green button below. It’s green because it’s safe.

Who makes the list?

Corky Siemaszko of the New York Daily News reports that America’s First Lady, Michelle Obama, has debuted on the list and is poised to rise to even greater heights next year. Mrs. Obama took the 40^th spot. By contrast, Laura Bush peaked at number 60 in 2007.

“Not only is she a First Lady, she’s the first African-American First Lady and that accords her a certain amount of power,” said Heidi Brown of Forbes.

“A media magnet”

Brown, who was one of the compilers of the list, told Siemaszko that the Forbes 100 most powerful women list takes into account how much total media attention a candidate receives, and judging by how often Michelle Obama appears in the media for things as serious as political issues or as splashy as what she’s wearing, it’s clear that she’d a “media magnet.”

“She’s done a lot to get her message out,” Brown said. “She’s been effective at reaching out not only to the media, but to regular people as well.”

More Obama administration members made the list

Michelle Obama is definitely not alone on the Forbes magazine “100 Most Powerful Women” list. Additional ranking members include Homeland Security leader Janet Napolitano (51), Security and Exchange Commission chief Mary Schapiro (55) and Health and Human Services leader Kathleen Sebelius (56). Perhaps Sebelius received that ranking before she came out in public and said that the public option was “not the most important” part of President Obama’s health care reform initiative.

Justice and a New York state of mind

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New Supreme Court Justice Sonia Sotomayor made her debut on the Forbes 100 most powerful women list at 54, but she has some catching up to do with fellow justice Ruth Bader Ginsberg, who sits at 48. Both justices are New Yorkers, but they are not the state’s highest ranked woman. That honor belongs to PepsiCo CEO Indra Nooyi, who continued her hold on the number three slot.

Speaking of New York, Secretary of State Hillary Clinton is still on the Forbes 100 most powerful women list at 36^th, but she has lost a little ground since the 2008 presidential election, when she ranked at number 28.

More from the corporate world

Yahoo! head Carol Bartz ranked high on the Forbes 100 most powerful women list at number 12. This proved to be more than enough to earn her the cover shot on this edition of Forbes magazine.

Heidi Brown told the Daily News that another woman on this year’s Forbes 100 most powerful women list who should prove to be an up-and-comer is Sallie Krawcheck. While she was forced out of Citigroup, she quickly caught on with Bank of America, where she is now the Chief Executive for Global Wealth Management. Krawcheck ranks 87^th on the list in 2009.

Mary Erdoes of J.P. Morgan may bring up the rear on Forbes 100 most powerful women list, but that certainly doesn’t mean that her accomplishments in the banking and investment world have not been tremendous.

Where’s the media?

Forbes decided that they’d introduce a separate list of female media “movers and shakers,” said Brown. That’s why people like “Today” show host Meredith Viera, “CBS Evening News” anchor Katie Couric or “Good Morning America” co-host Diane Sawyer don’t appear in the Forbes 100 most powerful women list.

“They wield a different a different kind of influence,” Brown said.

“And the winner is…”

For the fourth year running, German Chancellor Angela Merkel has taken the number one spot on the Forbes 100 most powerful women list. She finished ahead of America’s Federal Deposit Insurance Corporation chair, Sheila Bair. Bair was last year’s runner up, too, although if America’s banking crisis is turned around, I’d say that Bair deserves serious consideration for the number one slot in 2010. Healthier banks and a stronger flow of auto loans and the best payday loans would indicate a healthier economy, which is something that should make anyone smile.

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