Greece has not met the promised deficit targets, but blames oncoming recession. It is though the very austerity program that is the likely culprit, and it was predictable. (READ - “US-Europe-Rising Risk of Recession” - diplomaticallyincorrect.org/films/blog_post/us-europe-rising-risk-of-recession-imf-mo-by-ambassador-mo/35278



 Vicious Cycle: This places the whole “rescue plan” by EU partners and the IMF into doubt. The stability of the Eurozone is shaken, and the Euro itself suffers standing and value. It is a vicious cycle, and we predicted it and outlined this likely scenario on several occasions. Simply stated, in the face of economic malaise, austerity does not bring health but a greater slide toward recession. It increases the very risk of the word that is most feared now – “contagion” – because cuts in liquidity and credit quality are worsened. Contagion: PHOTO – It's a flush but also a torturously extended and to some perplexing spiral downwards. Cats sees it as magic, but humans call it vicious cycle or contagion. If you’re wondering what happened to your savings, your job, your home, your sense of security – we trust you have more information than the cat to see what you don’t see anymore! The risks globally and regionally are also escalating. Too much depends on things going just as planned, and, of course, Germany’s deep pockets. (READ: “Saving the Euro or How Deep Lederhosen Pockets?” - diplomaticallyincorrect.org/films/blog_post/saving-the-euro-or-how-deep-lederhosen-pockets-by-ambassador-mo/35323
). It is not that perhaps there is a lack of will, but the uncertainty itself furthers not just risks but perceptions that further the vicious cycle toward economic slowdown. Thus mere risk and perception become reality. Contagion! 

 Undermining EU Project: The risks though to Europe are not just economic. They undermine cohesiveness and the whole EU project. (READ Statement of Slovakia’s PM as to effect upon current and potential EU members diplomaticallyincorrect.org/films/blog_post/slovakia-pm-debt-crisiseuropean-integration-by-ambassador-mo/35377 ). The risks are more immediate to Europe and immediate region/trading partners. However, contagion as well as more subtle effects are felt globally. Even with its substantial economic/development momentum, China is not immune, (although its huge currency reserves also provide China with best suited remedy to prime the economic pump to maintain positive growth). Those states/economies with the closest financial links to the Eurozone will most likely continue to be affected including the US, Japan and even petro-exporting states. Not Missing the Lesson of Greece: As for Greece, there is no measurement for success. Unfortunately more austerity is probably only to continue to deliver greater downward economic momentum and missed budget deficit reduction targets. This "hole" is most likely to be plugged again, but it is considerably more difficult to halt the negative momentum or find the will to fix the structural flaws that are being patched up currently. It’s a lesson for the rest of Europe and US. FILM REPORT – “World Bank Danger Zone” - diplomaticallyincorrect.org/films/movie/danger-zone-economy-world-bank/28630 By Ambassador Muhamed Sacirbey








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 Much more at “International Financial Crisis Channel” - diplomaticallyincorrect.org/c/international-financial-crisis