“So while foreign newspapers are filled with pictures of Greek students rioting – an annual pastime, rather than a response to any particular crisis – [Greek financial minister] Mr Papaconstaninou and his colleagues in the newly elected centre-Left Pasok party are more concerned about a range of problems that are simultaneously far more dull, and far more serious,” the Daily Telegraph reports. “Tax avoidance, national debt and a vast pension gap have pushed the country to the brink of bankruptcy.” “George Papandreou's government came to power thinking that the government's deficit would amount to six per cent of GDP, so” explains the London daily, it “based its manifesto on spending its way into recovery. Once in office, it discovered that its predecessors from the centre-Right New Democracy administration had in effect been cooking the books, and that the deficit was running at 12.7 per cent.” All of which, concludes the Daily Telegraph, is "leading many to label Greece the next Dubai”.

"After Dubai, fears for PIGS,” Les Echos aptly headlines, pointing out that Greece is not the only country unnerving the financial markets. "The purposely pejorative acronym Anglo-American traders use for Portugal-Ireland-Greece-Spain in one fell swoop has been on everyone’s lips in the markets and the British press for weeks,” writes the French daily. Seeing as it is out of the question for these countries to quit the euro, Les Echos is antsy about “the impact any potential aggravation of the PIGS’ troubles might have on the whole eurozone”.

Risk of domino effect

"Is Greece's debt crisis also a crisis for the euro?” asks The Guardian. “The answer is a definite no if ‘crisis’ means ‘the break-up of the eurozone’.” “But,” the British paper acknowledges, “this is definitely a crisis for eurozone politicians and the European Central Bank. Nobody really knows what happens when a member state suffers a serious debt crisis. Ireland, obligingly, recognised the danger and adopted extreme austerity measures. The bond market (at least for now) is reassured by the sight of tax rises and cuts in public spending. Greece, on the other hand, seems to be nowhere near the point of signing up to austerity.” Spiegel online points out in this regard that the country’s European partners are very wary of Greece, especially since Athens has been conspicuous for repeatedly lying about its finances in the past – and “respecting the stability pact for only a single year (2006) since it introduced the euro”.

In the face of the Greek crisis, the German news magazine notes that the European finance ministers are certainly on red alert, but their hands are tied: "Brussels is stuck. Normally it is not supposed to fork out money to a member state to stop the gaps in its budget. And even if there were a way to get round this proscription, the consequences would be fatal: the budgetary carelessness common to countries like Spain, Italy and Ireland would spread throughout the continent. The message would be clear: what’s the point of fiscal discipline if others are going to end up footing the bill? What’s more, there’s the risk of a domino effect: if one eurozone member falls, speculators are going to test other candidates’ stability and the monetary union could burst at the seams.” Der Spiegel quotes one London banker telling a joke that is going the rounds in the business world: “If someone’s €1,000 in debt, he’s got a problem. But if someone’s €10 million in debt, it’s his bank that’s got a problem. And in this case the bank is Europe.”