The Crisis in Greece Spreads Across Europe

Originally published by the Carnegie Endowment for International Peace
As the problems in Greece intensify, the European Union and International Monetary Fund are preparing a support package to prevent the crisis from spreading further, but “the contagion is already there,” says Uri Dadush. The crisis has already had a “major effect on the euro,” which has fallen by 10 percent relative to the U.S. dollar since December.  Additionally, credit ratings have been downgraded in Spain and Portugal.

If the crisis were to escalate, then there will likely be spillovers to other countries outside of the Euro area. Dadush warns that the fall of the euro “affects the competitiveness of the United States” and will hurt exports around the world.