Paris: Markets were on edge on Wednesday as Greece admitted it is in a crisis, the rouble plunged, Dubai debt strains deepened, and Britain and Ireland revealed drastic cutbacks to reduce overspending.
Shares in Europe and the United Arab Emirates tumbled over mounting anxiety over debt in Greece and Dubai, as the state of public finances in deficit-ridden countries highlighted governments’ dilemmas in exiting from huge stimulus programmes.
The British and Irish governments were making budget announcements on tough action to cut spending and curb deficits, and Britain revealed that its recession was far deeper than previously estimated.
And Greece revealed belatedly that it was working on radical action to reverse a deepening financial crisis that has battered its credit ratings and credibility in the markets, and revealed strains in the 16-nation euro zone. “I can assure you that the government will do whatever is required to regain this lost credibility,” finance minister George Papaconstantinou said.
Greece’s financial strains were put in a spotlight in the wake of the debt crisis in Dubai, where state-owned conglomerate Dubai World has requested a debt standstill. The debt dramas in Dubai and Greece caused one the sharpest falls of the Russian rouble for months, with the currency losing value against the dollar and the euro.
Trading in the rouble opened at 30.80 to the dollar, an increase of 0.54 rouble from Tuesday and 0.70 rouble higher than the central bank’s official exchange rate.