Greek Entitlements Threaten European Stability

The financial crisis in Greece has triggered a 4.1 percent drop in the value of the euro last week. That's the biggest weekly decline since Lehman Brothers holdings were liquidated. The decline threatens to destabilize the entire European economy and instigate a world wide recession.

President Barack Obama spoke by phone with German Chancellor Angela Merkel for the second time in three days, adding to the international pressure Europe has faced since a hurriedly arranged conference call of Group of Seven finance chiefs on May 7. Obama yesterday emphasized “the importance of the members of the European Union taking resolute steps to build confidence in the markets,” White House spokesman Bill Burton told reporters in Hampton, Virginia.

That's a laugh. Mr. Obama is all about telling the Germans how important it is to protect their currency and financial markets? Just a year and a half ago he was on an apology tour telling the world that the economic financial crisis, instigated by US government meddling in the financial sector, was the fault of greedy US financial speculators. He followed that with a spending spree the likes of which the world has never seen. And now, with government debt and entitlements spending in Greece threatening to pull the entire European economy under, our Professor of Obamonomics, who has been pushing the country to exactly where Greece is now, wants European nations to take resolute steps to build confidence in...the markets?!

The euro slid to $1.2715 from $1.3293 last week and is down 15 percent since late November. European stocks sank the most in 18 months, with the Stoxx Europe 600 Index tumbling 8.8 percent to 237.18.

Sounds like trouble. What does Brian Williams know that David Letterman doesn't?

The extra yield that investors demand to hold Greek, Portuguese and Spanish debt instead of benchmark German bonds rose to euro-era highs. The premium on 10-year government bonds jumped as high as 973 basis points for Greece, 354 basis points for Portugal and 173 basis points for Spain.

Ouch, huh Dave?

Britain, the EU’s third-largest economy, won’t contribute to a fund to shore up euro countries, though it backs efforts to restore stability, Chancellor of the Exchequer Alistair Darling said.

“When it comes to supporting the euro, that is for the eurogroup countries,” Darling told Sky News.

Now that sounds reasonable. One of the few things reasonable coming out of England these days.