Europe’s economic problems will be pushed off of the front pages, at least while the East Coast braces for Hurricane Sandy and its aftermath. But the bailout of Greece is in real trouble. The coalition that runs Greece has begun to fall apart. Not all members agree to the nature of cuts in jobs and worker pay. And the International Monetary Fund and European Union have insisted on austerity measures that will make deep cuts necessary. The standoff could cost Greece its next aid payment and raises, for the umpteenth time, the possibility of default.
The bailout of Spain also has been rocked by disagreements about its size and the extent to which the nation will agree to enforcement of its budget by its neighbors. Efforts to get Spain to accept a massive aid package have gone nowhere in the past few days. According to Reuters:
Italian Prime Minister Mario Monti meets Spanish Prime Minister Mariano Rajoy on Monday and while little is expected from the meeting, some expect Italy to keep pushing Spain to seek a bailout as it would lower borrowing costs for other peripheral euro zone countries.
Douglas A. McIntyre