“Central banks intensified warnings that Europe’s failure to tame its debt crisis threatens to roil the world’s financial markets and economy as Greece’s election in two days looms as the next flashpoint for investors,” reports Bloomberg. Monetary policy makers from Canada to Japan to the United Kingdom continue to sound alarm bells about potential fallout from the single currency bloc’s troubles. Their warnings come as Group of 20 leaders are set to convene in Mexico next week. According to Bloomberg, “absent a quick fix from divided European governments, central bankers may have to engage in fresh crisis-fighting of their own to ensure markets operate and their economies grow if the election jolts investors.” Lawrence Goodman, president of the Center for Financial Stability in New York, feels that such action may be close at hand. He states, “It will be very important for central banks over the next few weeks to articulate what their role is. The key goal will be to provide sufficient liquidity in the event of a freeze.”
CNBC quotes European Central Bank President Mario Draghi, who on Friday said that the euro zone economy faces serious risks and politicians must act fast. Under his leadership, the ECB is poised to provide further liquidity to solvent banks. He stated, “The ECB has the crucial role of providing liquidity to sound bank counterparties in return for adequate collateral. This is what we have done throughout the crisis, faithful to our mandate of maintaining price stability over the medium term — and this is what we will continue to do.”
The crisis is compelling numerous companies to take action of their own. “Just days ahead of a crucial election in Greece,” the Wall Street Journal has learned, “Carrefour SA said it would leave the country, its only unprofitable market, while it expands in Argentina where business is brisk.” France’s biggest supermarket retailer in terms of sales has announced plans to sell its 50 percent ownership interest in its supermarket chain in Greece to the Marinopoulos family, its local partner. Terms of the deal are undisclosed. “The announcement comes just a few hours after the company said it plans to acquire 129 supermarkets in Argentina,” according to the Journal.