It is apparent not only that US banks have lost confidence in their European counterparts and have started shutting them out of inter-bank funding markets, but also that US officials are busy making matters worse by seeking to shift blame for America\u2019s dire domestic performance on to influences from this side of the Atlantic. \u201cSeventy-five per cent of the dark things happening in the world economy are because of the eurozone,\u201d\u009d one of Geithner\u2019s team said at Marseille….<\/p>\n
Markets are convinced of several things: that Greece is politically incapable of meeting the austerity demands imposed by the EU and the IMF, and is now locked into a spiral in which its debt position can only become worse as its economy deteriorates; that a default on Greek sovereign debt is therefore inevitable sooner rather than later, and will impose losses on European banks, including the likes of Soci\u00c3\u00a9t\u00c3\u00a9 G\u00c3\u00a9n\u00c3\u00a9rale and Cr\u00c3\u00a9dit Agricole of France, which may in turn need to be bailed out by their governments; and that the eviction of a bankrupt and incorrigibly irresponsible eurozone member is not only a technical possibility but an economic necessity if the single currency is to survive at all.<\/p>\n