Eurozone

m.p.3. / Flickr/CC

After the recent crisis, the Greek economy is only slightly more stable ground. Meanwhile, economic uncertainty afflicts other countries in the Eurozone, which binds nineteen nations into a single currency.  Americans meanwhile are watching the turmoil and wondering what’s at skate for them in Europe’s struggles.

The European economy has been struggling for the past half-decade, now the latest trouble comes from Cyprus. Although tiny in size, many worry that its problems will spill over to larger countries and even across the Atlantic to the United States.  We’ll look closer at what’s happening and whether we’ll feel an impact in New Hampshire.

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A day after getting approval for a financial rescue he vowed Spain would never need, Prime Minister Mariano Rajoy said it was his idea all along.

"No one pressured me into this. I pushed for it myself, because I wanted a line of credit," Rajoy said. He refused to call it a "bailout." He called it a "victory" instead.

Most Spaniards don't buy that. In a poll published Sunday, 78 percent of respondents said they have "little or no" faith in Rajoy and his ruling conservatives. That's just six months after they won elections in a landslide.

Spain Scrambles To Avoid A Financial Bailout

Apr 18, 2012

Spain's Prime Minister Mariano Rajoy visited Poland last week and tried to assure international markets that Spain would not join the list of European nations needing a bailout.

"Spain will not be rescued," he said at a news conference. "It's not possible to rescue Spain. There's no intention of it, and we don't need it."

However, Spain's borrowing costs are nearing levels that were followed by bailouts for Greece, Ireland and Portugal.

To people not directly involved in fixing, analyzing, or monitoring the Eurozone crisis, it can take on the character of black magic.  And it’s easy to think that the dark arts of the European Central Bank’s low-interest lending initiatives, national bond auctions, and bailout talk have little bearing on our daily lives.

In fact, they very much matter.

Euro coins and houses
Images_of_Money / Flickr Creative Commons

To people not directly involved in fixing, analyzing, or monitoring the Eurozone crisis, it can take on the character of black magic.  And it’s easy to think that the dark arts of the European Central Bank’s low-interest lending initiatives, national bond auctions, and bailout talk have little bearing on our daily lives.

In fact, they very much matter.

With Greece entering its fifth year of recession and dealing with harsh austerity measures imposed as part of a eurozone bailout deal to save it from default, its society is in upheaval. Opinion polls suggest the old political system is collapsing, and extremist parties are gaining popularity ahead of spring elections.

At a recent protest in Athens, a large bronze bell tolled as thousands of policemen in full uniform marched solemnly through the streets. They ominously waved their handcuffs at Parliament, shouting, "Take your bailout plan and get out of here."

"I have a little bar. A drinks bar," says Chadd Ritenbaugh. His bar is called El Catalonia. It's in the port of Marbella, on the Spanish coast.

"Just sun, sand, and sea," he says. "It's just kind of empty at the moment."

Ritenbaugh bought the bar in 2009. Since then, business has gone downhill. He tried, and failed, to sell.

"Nobody's out buying bars right now," he says. "Banks in Spain are not lending a cent — a euro cent."

Chad himself tried and failed to get a bank loan. "Absolutely nothing," he says.

Stock prices rebounded somewhat Wednesday, one day after their biggest sell-off of the year. What caused prices to plunge Tuesday was an all-too-familiar problem: the Greek debt crisis.

European officials have cobbled together a deal to keep Greece from defaulting, and investors all over the world who hold Greek bonds are weighing their options. They're worried about what could happen if they reject the deal.

On tonight's All Things Considered, NPR's Robert Siegel talks to the chief of the International Monetary Fund Christine Lagarde.

Naturally, Robert focused his interview on Greece, which has been engulfed in a debt crisis that has threatened its membership in the European monetary union. Robert asked Lagarde about the tough austerity measures Greece has agreed to and whether those measures could promote a shrinking economy as opposed to getting Greece back to prosperity.

Bailout Talks Reopen Wounds In One Greek Village

Feb 21, 2012

Europe is still a continent that looks over its shoulder at a long and sometimes dark past. That extends even to the protracted Greek bailout negotiations, where Germany's dominant role has scratched at some historical wounds.

Germany occupied Greece during World War II, committing atrocities that some older Greeks can't forget. This history defines the pretty village of Distomo in central Greece, where Nazi soldiers killed 218 men, women and children in June 1944.

The eurozone crisis has focused attention on debt-burdened Greece spiraling into decline. Meanwhile, Portugal is seen as the international creditors' poster-child for obediently slashing spending and welfare benefits.

Nevertheless, the Portuguese national debt continues to grow, and the country is mired in recession and soaring unemployment.

The Portuguese national character has long been identified with Fado music. Raquel Freire, an activist with the local Occupy movement, says the melancholy style helps explain decades of resignation.

The European Union says Greece has made some progress, but not enough, to merit the new bailout it desperately needs to avoid default and keep the euro as its currency.

Greeks are increasingly bitter about the austerity measures the EU is imposing on them. And Greece's EU partners are losing trust that the Greeks will implement them.

Now, talk is growing about contingency planning if Greece fails to meet the bailout conditions and defaults.

Dennis Skley / Flickr

Recently, Wells Fargo Securities released a short report offering a state-by-state look at the places that could be hardest-hit by a potential European recession.  Since New Hampshire has carved out a healthy niche for itself in the high-tech components export market, we thought this report might be of interest to our StateImpact readers.