Monday, June 11, 2012

Will the Euro die this week?

An election in faraway Greece is hardly something to keep policymakers across the globe awake at night. After all, the tiny nation forms just about 2% of the  Euro zone's economy. But this time it's definitely different. With the second Greek elections in as many months only a week away, not just Europe but the whole world is on tenterhooks. This is because the elections will decide not just the fate of the new Government but whether the country continues to remain a part of the Euro Zone.

Surely, shock waves would be sent across the world if Greece decides to sever its ties with the European Union. In fact, the aftermath of such a possibility is so complex that no one has been able to get a firm grip on the same. What is almost assured though is a big setback for the Euro currency. Besides, borrowing costs for other peripheral nations like Spain and Italy could go soaring into the stratosphere, bringing them to the brink as well. As for India, it will not be spared either as the reverberations are bound to be felt here as well. All in all, brace yourself for some really rough ride. The weather is about to get extremely turbulent.

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