January 24, 2012
Greek deficit exceeds target: 9.6%
Greece development minister Michalis Chryssochoidis announced that deficit reduction targets (target of 9%) were missed but still better than the 2010 deficit of 10.6%. The Fitch credit agency then warned that the missed target indicates Greek potential for pulling the eurozone into further crisis, though the Fitch overall outlook is low probability of a euro breakup (January 5 "Risk Radar" report). Fitch has suggested most important arena for such a result is with the burgeoning Italian debt problem, which greatly exceeds Greece's numbers.
Washington Post article:
"Greece has been forced to cut spending and raise taxes in the middle of a severe downturn, slashing pensions as well as state salaries, jobs and services. As public confidence has evaporated, consumer spending — the biggest driver of the economy — has plunged, generating cascading losses at private firms. The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees."