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Their banks failed first, and their public debt was relatively low.

Public sector balance + private sector balance = current account balance

Ireland had a hole in the private sector and a healthy public sector.

Greece had a hole in the public sector and a healthy private sector.

The brainless should not be in banking -- Willem Buiter

by Migeru (migeru at eurotrib dot com) on Tue Apr 13th, 2010 at 01:05:11 PM EST
[ Parent ]
Yes, I should have thought of that!

So, now, consider: most of the holdings of the Greek banks are in Turkey and the Balkans.

In some Balkans countries, these banks are the major source of liquidity.

It just never ends.

Austrian and Greek banks together have like 85% of external exposure in the Balkans.

by Upstate NY on Tue Apr 13th, 2010 at 01:19:01 PM EST
[ Parent ]

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