Sunday, February 14, 2010
What happens next?
Greece is the trigger for a so-called sovereign debt crisis that is every bit as bad as the turbulence caused by the collapse of Lehman Brothers, the American investment bank, in September 2008. Fears that countries will default on their debts spread to other eurozone economies, notably Portugal, Spain, Italy and Ireland, but also to Britain, America and Japan. The crisis causes a second damaging downward leg to the global recession, more serious this time because governments and central banks would no longer have the ammunition to head it off. The spectre of a second Great Depression looms once more.