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Greece a flashpoint for Europe?

Monday, July 06, 2015 - 02:02

Greece's 'No' vote has been closely watched around Europe, particularly in Spain where banks needed a bailout in 2012. David Pollard looks at how the latest crisis could influence the election there later this year.

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Don Quixote: a Spanish literary hero famous for tilting his lance at imaginary foes - like windmills. Austerity though - that's seen as a very real enemy. Many Spaniards in solidarity with ordinary Greeks. (SOUNDBITE) (Spanish) SPANIARD, LUCIA VILLANUEVA, SAYING: "They're right because they're sick and tired of austerity. They've confirmed austerity has made things worse, which is more or less what has happened here." If anything, the figures suggest the opposite. Industrial output is up at the fastest rate in over a year - new data painting a picture of recovery. But growth at a price. Spain, Portugal, Italy, and Ireland have had bailouts and austerity, but none as severe as Greece. BGC Partners Mike Ingram. SOUNDBITE (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: ''The cost to Spain has been extremely high levels of unemployment and extremely low wage growth. So yes they're doing well, but from a low base and some of the scars in the employment market are going to be there for many, many years to come.'' And though finance minister Luis de Guindos says its recovery means Spain is different to Greece, for the populist Podemos Party, the referendum in Athens was the people finding their voice. Leader, Pablo Iglesias. (SOUNDBITE) (Spanish) PABLO IGLESIAS, PODEMOS LEADER: "Governing is all about listening. It would be a serious lack of responsibility of the leaders of two important countries, France and Germany, to not take note of the referendum result. We hope they change their attitude." Many economists minimise the risk from Greece. Mario Draghi's policy of pumping funds through its veins shows the ECB will protect growth, they argue. Even if what's happened in Greece highlights Europe's flaws. SOUNDBITE (English) MIKE INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: ''It doesn't grow enough, it doesn't create enough jobs ... and as I think the episode in Greece also demonstrates, the economic arguments is quite often subordinated to political imperatives, and my goodness, aren't there a lot of politics in the euro zone?'' The answer to that a clear YES - but much more of it in the pipeline if Greece is to keep its place in the euro zone.

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Greece a flashpoint for Europe?

Monday, July 06, 2015 - 02:02