For those who follow the currency markets, you have probably noticed the rapid gains by the dollar in recent days. It wasn't long ago that the dollar hit new twelve month lows against the euro. Even with the massive drop on Wall Street last week, the dollar was still managed to slip briefly below $1.27 before closing just over that amount. If you compare that to $1.34 a week ago and even $1.50 within the past year, that's a massive tumble for the euro. Clearly the Greek crisis has been a shock to the system though Greece is only one of the very serious problems. The markets have been looking at Spain and Portugal as well as Italy and Ireland, all of whom have serious challenges ahead.
Once Europe has settled then the markets will no doubt look for the next concern such as California or who knows what? It's easy to understand those who are arguing against more cash - who wants to tell local voters they're paying for some other country in this climate - but there seems to be little alternative. BBC:
EU finance ministers are set to meet in Brussels to discuss establishing a new "stabilisation mechanism" to prevent the Greek debt crisis from spreading.
The fund would reportedly have up to 70bn euros (£60bn) at its disposal to guarantee loans and be available to the 16 member states in the eurozone.
Many leaders want it agreed before markets open on Monday to prevent investor fears over the euro spreading.
