Greece and the Rest

About to become the first defaulter in 20^th century, Greece had no option but to take austerity measures. However, the called out referendum resulted in ‘NO’ for such measures. Greek was in a position to be thrown out from the Eurozone. It was expected that other economies would also be affected partly adversely. The critically impacted stock market witnessed this by the downfall of the stock prices for a short period. The share market of Hong Kong, Korea, Germany, China and London lived up to the expectations. It didn’t really come as a shock. In context of India, it was expected that the currency would depreciate due to hike in interest rates and further the import prices would go up.

There has been a great uncertainty in Greece for a long time now. Before the referendum on austerity, people were also unsure if the crisis would lead to a civil war. Some said the Greek crisis is a reminiscent of the military rule of 1960s and 1970s. However, the scenario now seems to be under control after the decision made by the global markets to support Greece in extending the bailout package. For the time being the crisis for the Greece economy appears to be over but much will depend upon the implementation of various reforms, especially relating to taxation and pension issues. The deal might undergo constant changes unless the final negotiation is made. Experts have different viewpoints and it is unlikely to say something for sure. Nonetheless, Greece would maintain its integral position in Eurozone as decided, considering it beneficial for the world economy.

With Greece still struggling to deal with its situations, China is expected to be hit by a crisis soon. Fall of the China market can be attributed to ‘Margin Trading’. Even the government intervention didn’t do any better. The bursting of this bubble is expected to do more harm to commodity based economies. The commodity prices are falling and might be worse in the near future. The back to back crisis is indeed a sign of the global economy to be heading towards a serious slowdown. Also the fact that the growth of Asian economies is expected to be low is a cause of worry. Global economic recovery must be the upcoming target for each and every economy.

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