Is Greece heading for a financial collapse
Greece is one of the four weakest countries in the European zone which seems to be ripe for a financial collapse. In the last few weeks, the cost of borrowing for Greece government has gone up over two times the cost for Germany and France.
And in the last few days, none of the global banks have been forthcoming to lend further loans to Greece government. So it has been forced to go in for an IMF loan support along with European Union loan support.
But the Greece government has been forced to accept these loans only after major austerity plans. But the Greece public are up against the government austerity measures already, and the Greek history does not give any hope for lenders either.
So there are enough chances for the Greece country to go for loan default over the coming months, once the domestic pressure shoots up. And if that happens, that could also spell the end of the common Euro currency.
We can then expect Germany and France forcing the other weaker countries like Spain, Portugal and Ireland out of the Euro group. That could in turn create a wider gap in the European union which can pull down the economic recovery in that region badly.
That in turn could well pull down the entire global recovery badly. That is the reason why the US is getting into advising Germany and the EU leaders on further handling of the European debt crisis effectively.
Whether US will be successful or not in the efforts, only time will tell.