June 20th, 2012
02:42 PM GMT
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(CNN) - Now that the Greek people have voted and a government will be formed, we need to think about where this crisis will go.

The new Greek government will invariably go to Brussels and ask for some relief; breathing space is the phrase that will be used.

The Europeans will almost certainly grant it - to not do so would be cruel, especially bearing in mind the terrible suffering of people in Greece at the moment.

But outside of Greece what happens now?  Like a balloon that is squeezed, the European crises merely bulge out somewhere else - and that is what is happening now.

Greece may no longer be the terrible threat to the euro it was a few days ago, so instead attention turns to Spain, with its bond rates at the unsustainable level of 7%. Or to Italy with its rising rates. Or Ireland, where they will be seeking better terms too if Greece gets relief. Or to the intransigence of the German government.

The problems within Europe's banks now threaten to become the most serious side of this crisis. Spanish banks are the most obvious evidence of this, but make no mistake - French and German banks are also nursing nasty assets on their balance sheets which have not yet fully been accounted for.

The banking system is so linked that any problems with those Spanish banks will inevitably take its toll on its German and French counterparts. They may be able to withstand the losses, but at what cost? Cutting back on traditional lending to small and medium-sized businesses, which in turn slows down economic growth even further.

You start to see how this crisis is perpetuating itself.  The Greek crisis has not been taken off the stove - it has merely been moved to the back burner while other more pressing problems are dealt with.

But with the relief negotiations still to take place, along with a possible weak coalition and an economy in its fifth year of recession, expect Greece’s financial problems to bubble up to the surface again before long.

soundoff (17 Responses)
  1. Max

    Yes CNN everything in Europe is hopeless and everything in the US is super. Who beliefs this BS anymore anyway. The US started this crisis yet you pretend it`s all Europe. The US has the largest Debt of any nation in the world. And Yet all the US has done since they began this crisis is increase spending my amounts equaling the Greeks. The Euro also is a brand new currency that is faced with it`s first real crisis. Hence displaying weaknesses that Europe is reforming. You continue to interview people who said the Euro would collapse and now it doesn`t happen you start attacking other issues. You are not a news channel by any good standard.

    June 20, 2012 at 7:49 pm |
  2. Pat

    Richard Quest should work for some anti-EU British tabloid, not a "serious" news outlet like CNN.

    June 20, 2012 at 8:07 pm |
  3. 4sight

    There is no solution to a debt-based economy (and society) where a debt-based economy continues. Leaders at the G20 Summit spoke of 'stimulating growth' – but to use the balloon analogy in this article, there comes a point where the balloon simply cannot and will not inflate any longer and bursts. The painful outcome (and it may take a violent uprising by angry, hungry, desperate people) is a paradigm shift – an entirely new system not based on cutthroat capitalism or debt driven consumerism, but smaller local units that use barter rather than money and credit for basic necessities (food, water, clothing and shelter). I cannot imagine this radical new system, or the chaotic transformative forces that must take place to get there; all I know is our current way of life can and must die. And it will be soon. The fires already burning in Greece (unemployment, poverty, suicides, riots) will intensify and spread. Get ready.

    June 20, 2012 at 9:00 pm |
  4. Salvador Psaila

    Richard Quest pioneered making business news exciting and clear. Have you noticed how other channels and presenters now use his dramatic style? If not you are not old enough to remember news reporters in the 90's!
    Always like to watch him drilling dull political types. He deserves every $ he earns!

    June 20, 2012 at 11:39 pm |
  5. Ken Young

    Congratulations, son. Now you will die of leukemia instead of heart attack.
    Shall we go out to celebrate & get drunk every night for a few months?!

    June 21, 2012 at 11:11 am |
  6. arapikos

    In spite of what has been written–all make some valid points. The most objective news reporting in these days belongs to "Rachael Maddow". At least, she tries very hard to present the facts as they are. Love her professionalism and enthusiasm and love for good news.

    June 21, 2012 at 2:07 pm |
  7. aurelius

    Next . . . we'll learn that Germany is leading a new Europe that includes the Northern nations of Europe and a few neighbors that can keep up with German discipline. In a few days, we'll learn that Greece, then Spain, are as dead as Julius Caesar. The French will be left with the losers to whom they can preach the blessings of socialism.

    June 21, 2012 at 2:57 pm |
  8. William Rivas

    The biggest fear that History repeats itself from the 19 Century World Financial Crisis of the 1920s Great Depression that preseded a World War 3...a decade later...

    June 22, 2012 at 5:53 pm |
  9. siva devi PONGE

    Richard Quest is one journalist who just doesn't mince words and who goes straight to the point. Long live, King Richard!!

    PONGE Siva Devi

    June 23, 2012 at 2:52 pm |
  10. Nick

    Richard Ques,I do not be anti-European. Most of your articles concerning the Euro-crisis, are caustic, sarcastic, negative and misleading. Better look into your inner ego and see what's wrong with you. So long

    July 12, 2012 at 2:34 am |
  11. Mogotsi Mpshane

    @ William Rivas, I am also afraid that we might see another global conflict.

    August 27, 2012 at 2:36 pm |
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About Quest Means Business

Quest Means Business airs Monday to Friday, 1600 New York and 2100 London, and is hosted by Richard Quest.



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