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Friday, August 20, 2010

Greek Economy Continues To Deteriorate

As most people in Europe enjoy their holidays, the Greek economy continues to plunge new depths.

A report by HSBC notes that Greek banks had lost 8% of their entire deposit base in the five months to May.

Savings are being used to get by, and the Telegraph notes that the Athens Chamber of Commerce has warned that its members are in "dire straits", with a majority facing a liquidity threat.

The European Central Bank (ECB) has now loaned Greece a record Euro96BN as at July. The question on everyone's lips is how much more will it be able to lend, and what happens next?

Once people return from holiday, and the financial markets face reality, there will be a reckoning.

The Greek economy is now in a tailspin, once the markets "post holiday" wake up to this fact the rest of Europe (those in the Euro) will feel Greece's pain.

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