Endgame in Greece?

Markets around the world tumble as talks with Greece over second bailout reach a critical point. But are Eurozone leaders manufacturing this latest crisis?

When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at mfawcett@albertaventure.com

Feb 10, 2012

by Max Fawcett

Never before in history has a country with so little mattered so much. Yes, Greece is back in the headlines today, as concerns about the state of a debt restructuring deal between the country and its creditors is roiling markets around the world. Five Greek cabinet ministers have already resigned their positions over the austerity measures being proposed by the Troika (the European Central Bank, the International Monetary Fund and the European Commission), and all of the major indices in North America are staring at their biggest single-day losses of 2012 as markets continue to worry about the possibility of a disorderly Greek default and further contagion in the rest of Europe.

Is this the beginning of the end for Greece’s place in the Eurozone, or the end of the beginning? The fact that Eurozone politicians have even broached the possibility of Greece leaving certainly suggests that it’s not as unthinkable as it was just a few months ago, and with the growing chaos in the country – there is yet another general strike, and rumours that the police have orders to arrest representatives of the Troika on sight – it may be that Eurozone leaders and creditors are all preparing the cut their losses. In a piece today, the Telegraph’s Jeremy Warner actually suggests that this is the outcome they’re actively trying to encourage. By imposing terms so draconian as to guarantee a backlash by the Greek people, Warner suggests, the Eurozone is effectively inviting it to expel itself.

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Closer to home, Agrium posted strong fourth-quarter results on Wednesday, with profits up 43 per cent over 2010 and revenue for the quarter hitting $3.18 billion. It also wrote down $61 million of its investment in Hanfeng Evergreen, a Chinese RTO (reverse takeover) that has been tarnished by the allegations of fraud leveled against Sino-Forest. Were it not for that one-time charge, Agrium says that its net income (which came in at $1.20 per share) would have been more than a dollar higher at $2.34 per share.

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