Greece is flirting with bankruptcy. Its Government must borrow €53 billion this year in order to keep going and it faces an €8 billion bond redemption in April. The nation’s domestic banks have almost been shut out of inter-bank secured lending markets amid doubts over their collateral, mainly Greek government bonds. Greek public sector unions are in rebellion. Greece and Ireland are among countries in an “intolerable” economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc. The appeal of a voluntary departure is that a country would then be free to devalue its currency to improve competitiveness and to set its own interest rates.
But people elsewhere in Europe may also find that Greece’s troubles could eventually hit their wallets. The most obvious way would be through tax bills, if Europe agrees to ride to the rescue and help Greece deal with its mounting public and foreign debts.
