Greek vote on Eurozone is a nail-biter in U.S., too

Eurozone and China threaten one-two punch to U.S. economy

John Dyer By John Dyer

Greek firefighters in Athens protest against the non-renewal of their contracts in May. Expect more demonstrations in the run-up to a Greek general election on June 17. (Reuters/Panayiotis Tzamaros)

As we review the news at the start of the week, economic concerns in Europe promise to dominate world headlines in the coming days.

Last week, Spain asked the European Union for a bailout. This coming Sunday, Greek voters elect a new government. As days to the election wind down, expect a lot of nail-biting.

The Greeks will decide whether to elect politicians who will accept the dismal conditions of their EU bailout, theoretically stabilizing the Eurozone, or politicians who will reject those conditions, risking a wider panic.

In the United States, our politicians will be watching closely. After all, President Barack Obama’s election prospects hinge on the health of the American economy. If Europe goes down, it might take the U.S. with it, potentially ruining Obama’s chances of staying in the White House.

The Greeks’ choice is unpredictable. It is also unwelcome. Already, Greek society is reeling under the burden of austerity as well as the attention they’ve attracted as the sickest economy in Europe.

Obama has called on German Chancellor Angela Merkel to share Germany’s largesse with the rest of Europe, by supporting extensive bailouts, increasing German consumption and other stimuli, moves that would surely help Europe in the short-term but not necessarily improve the continent’s chances for sustained prosperity.

Merkel hasn’t budged. That’s what we mean by nail-biter.

China, too

As we wait for action in Greece, economic news in China isn’t due to lift anyone’s spirits, either.

Slowdown in the world’s second-largest economy is almost too big to contemplate — The Guardian discussed this fear and loathing last year — but nonetheless everyone will soon have to consider the implications of China cooling off, including the Chinese, who aren’t used to lack of demand.

From Massachusetts to McDonald’s, Americans are feeling the pinch of China’s contraction. The Boston Globe portrayed the sentiment:

“It’s not good news,” said Andre Mayer, head of economic research at Associated Industries of Massachusetts, a business trade group. “With Europe slowing down, you would hope China would keep going and maybe pick up some of the slack. But that doesn’t appear to be happening.”

Could be a long summer.

A Syria summit? Better than nothing

Economics aren’t the only topic on the international agenda this week.

Tensions between the U.S. and Russia have been high over Syria, where government-backed militias have reportedly been massacring civilians in a brutal civil war. In the American press, Russia is usually depicted as blocking significant actions to stop what others term human rights abuses in the Middle Eastern country.

Late last week, however, Russia’s stance towards Syria shifted slightly as American diplomats visited Moscow to discuss the issue. Russian officials signaled they were open to someone running Syria besides President Bashar al-Assad but said they would oppose the U.S. or others imposing a change on the country through military intervention.

“A thorough exchange of opinions on methods of promoting a peaceful resolution in Syria took place,” Russia’s Foreign Ministry said later in a statement. “The practical aspects of the Russian proposal to call an urgent international conference on Syria were also discussed.”

An international conference in the near future isn’t necessarily reason to celebrate. But, from the American perspective, it could be Syria’s best chance to implement a peace accord brokered by former United Nations Secretary General Kofi Annan.