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More Repercussions Of Austerity

|Includes:EUO, EWU, FKU, FXE, Global X MSCI Greece ETF (GREK)

All in a day's worth of headlines.

Greece:

  • A toxic combination of a recessionary climate and harsh austerity cuts have led to increased societal disintegration. On Wednesday, general strikes across Greece involving tens of thousands of Greeks shut down state schools and tax offices, public hospitals, court cases, and even local fruit and vegetable markets.
  • Moreover, the economic situation has deteriorated so much that many Greeks are finding it hard to pay for, well, pretty much anything. This includes civil unions and funerals. The number of Greek couples who married in church tumbled to 28,000 in 2011 compared to the pre-crisis level of 40,000 in 2008. Many Greeks don't even have enough money to bury their loved ones: "some Greeks do not collect their dead loved ones from the hospital to avoid having to pay for the funeral."

United Kingdom

  • The UK loses its AAA rating for the first time since 1978 in the face of George Osborne's implementation of harsh austerity measures that have stifled economic growth. Ironically, Osborne had implemented the austerity measures in part to keep UK's AAA rating, but this resulted in not only an unprecedented economic downturn but also the worsening of the UK's fiscal condition. As noted by Moody's, which delivered the ratings cut, the cut was delivered due to expectations the UK economy will "remain sluggish over the next few years" as well as the ineffectiveness of Osborne's austerity programme in improving the UK's financial standings.
Stocks: GREK, EUO, FXE, EWU, FKU