Jan. 18 (Bloomberg) -- European finance chiefs said Greece must rein in its budget deficit on its own as the nationâs fiscal crisis threatens to spread to other countries in the region. âThe Greeks are very much aware of how serious the situation is, and they are very much aware that they will in the end have to solve the situation themselves,â Dutch Finance Minister Wouter Bos told reporters today before a meeting with euro-area counterparts in Brussels. âThey have difficult work to do,â Germanyâs Wolfgang Schaeuble said. Greece last week presented its economic plan to push down a budget deficit thatâs still more than four times the European Unionâs limit of 3 percent of gross domestic product and which has prompted rating companies to cut the nationâs creditworthiness. Finance Minister George Papaconstantinou will brief his counterparts on the budget plan, which includes 10 billion euros ($14.4 billion) in cuts this year. Papaconstantinou said in an interview on Jan. 14 that overall government debt will âpeakâ at 120 percent of GDP next year and âstart declining afterwards.â He also signaled the need for Greece to provide more-reliable statistics after the EU said earlier this month that the countryâs data contained âsevere irregularities.â âThe serious reforms made to their statistics will help detect and avoid more problems like this in the future,â Schaeuble told reporters. http://www.bloomberg.com/apps/news?pid=20601087&sid=anQmz0rOyhjY&pos=4 No bailout money ? That should not bodeso well for Europe's GDP growth "wishes"...:eek:
Which is a worse problem to have, Greece or California? From: ECBâs Trichet Says Greece Is No California http://www.dailymarkets.com/economy/2010/01/14/ecbs-trichet-says-greece-is-no-california/ quote: Asked about any threat to the euro because of Greeceâs problems, Trichet pointed out that Greeceâs Gross Domestic Product (GDP) is a mere 2.5% - 3% of the euro zone GDP. In California, which has its own set of severe fiscal challenges, the magnitude of the problem is far larger (Californiaâs GDP is over 12% of U.S. GDP). He went on to stress that euro zone budget deficits currently amount to about 6.5% - 7% in the aggregate, compared to 12% in the U.S... So how would the bond markets react if there were issues occurring simultaneously with California, New Jersey, New York, Greece, Portugal, and Spain? The next few years will be very interesting. So what's a bigger problem, a failed US State, or a failed EU Country? Will Obama bail out California? And in the end, who bails out the US? What a mess. Got gold?