Greek ‘contagion’

6 May 2010

The Greek parliament has been debating and passing the necessary spending cuts and tax rises, in order to receive the bailout from the IMF and other European countries. There has been much discussion on whether the measures will be sufficient, and whether they will be implemented. Questions and doubts still remain. Also a quite serious issue is whether this lack of confidence in a country’s fiscal credibility will spread to other states or not. Many articles mention the ‘contagious’ effects of Greece, primarily Portugal and Spain, as if this is a disease spread from one country to another. People talk about the overall health of the economy, and how countries and economies suffer. This pseudo-medical language sounds nonsensical, but it is telling about how the markets – a collection of many people and interests – think about economy. How does one deal with contagion? Can there be immunization? An operation? Medication? What kind of pseudo-medical languages do people use? It does not really inspire much confidence.