The Wall Street Journal stated on 21 January that the financial markets are unconvinced by the Greek government’s assurances that it isn’t seeking outside help from either the EU or the IMF with its public debt. Analysts said the government is moving too slowly to address Greece’s fiscal problems and investors are showing their disbelief by selling down Greek stocks and bonds. A Commission spokeswoman denied yesterday’s reports that the EU was preparing a loan for Greece, saying she wasn’t aware of any financial bail-out packages being arranged.

Die Welt features an interview with the Chief Economist of Deutsche Bank Thomas Mayer. When asked if he is worried about the euro, he answers “The situation is more serious than it has ever been since the introduction of the euro. The trouble in Greece plays a key role for future development.” When asked what the worst case scenario could be, he answers: “If the Greece situation is handled badly, the Euro-zone could break down, or suffer major inflation”.
He added that “Neither the European Central Bank nor the Commission nor any other EU body can force Greece to implement necessary reforms in exchange for help.”
Meanwhile, the Wall Street Journal notes that the euro has lost value and that “persistent fears about Greece’s fiscal situation have turned trade in the euro into a vote on the currency bloc’s credibility.” A new publication by Econ Journal Watch, entitled “It can’t happen, It’s a bad idea, it won’t last: U.S. Economists on the European monetary union and the euro, 1989-2002” looks at the experiences with the euro and its prospects.

source: Open Europe