Indiana Grain Company, LLC

Posted: 02/15/10

By: tomgrisafi

There is probably not a better sign of a "global economy", than when a small European country becomes a big concern for U.S stock investors.

Even though Greece's gross domestic product is smaller than the GDP of most U.S states, portfolio managers have expressed serious concern over the euro zone countries financial problems.

European Union leaders last week pressed Greece to get its deficit under control and vowed “determined” action to staunch the worst crisis in the euro’s 11-year history.

“Greece used accounting tricks to hide its deficit and this is a huge problem,” Wolfgang Gerke, president of the Bavarian Center of Finance in Munich and Honorary Professor at the European Business School, said in an interview. “The rating agencies are doing the right thing, but it may be too little too late. The EU slept through this.” -Bloomberg

It seemed last week that EU leaders were prepared to come to the rescue of Greece with financial aid -- or at least guarantees for some of its national bond obligation. But those pledges, to the extent that they were pledges at all, have begun to evaporate.

It looks as if the "Greece Rescue Plan" that was announced, may have been a bit pre-mature. Plans to get the countries fiscal problems in order have hit a standstill.