- Tuesday, 08 November 2011 12:21
- Written by Sean Dudley
It’s been hard to ignore the constant media attention on the current Eurozone crisis, and after what has been a dramatic weekend both economically and politically in the countries most affected, fresh concerns have been raised with the start of another business week.
The Greek Prime Minister, George Papandreou, has agreed to step down in move which has been a long time coming, amid rapturous protests across the country. But fears are yet to be allayed, and the focus has turned to Italy, whom it has been predicted may be the next nation to dive into a huge economic crisis.
It was announced on Monday that the Italian governments cost of borrowing has reached a record high of 6.64%, the highest figure since the conversion from the Lira to the Euro. The figure is extremely troublesome for the Eurozone, as Italy is its third-largest member, and if it were to take a similar path to the one Greece has, the entire Eurozone would be in jeopardy.
Markets fell across Europe with the release of the most recent economic statistics, and all the big European economic players took a hit, with the German, Spanish and French markets all suffering. Britain’s financial sector has also felt the effects and there has been a fall in share prices, indicating that unfortunately Britain is not immune to what is going on over the Channel.
Greece has shown an upturn since Mr. Papandreou’s agreement to form a coalition government, and the big Greek banks have all reported positives after the government’s announcement.
Whilst the Greek economic crisis is far from ideal and is still a long way from being resolved, Greece does only account for 2% of the Eurozone GDP. Italy is the third-biggest contributor and if it were to fall into the economic chaos that Athens and Greece has seen in the recent past, one does fear that the magnitude of the ramifications would be catastrophic for the economy of Europe and the Eurozone.