World economies prepare for panic after Greek polls

Friday, June 15, 2012
By Paul Martin

By Stella Dawson and Jan Strupczewski
Thu Jun 14, 2012

Authorities in the world’s major economies are preparing for a possible market storm or public panic after cliffhanger Greek elections this weekend, officials said on Thursday, should radical leftists win and cast doubt on the nation’s future in the euro zone.

Britain announced on Thursday it would flood its banking system with cash as the euro zone’s crisis casts a “black cloud” over the nation’s economy.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, said that central banks were ready to take steps to stabilize financial markets – if needed – by providing liquidity and prevent any credit squeeze after Sunday’s election. Canada is “ready to act” if the situation takes a serious turn for the worse of there is “an external shock,” Andrew MacDougall, a spokesman for Prime Minister Stephen Harper, said on Thursday.

In Europe, authorities also laid plans for tackling turmoil such as if Greeks emptied their bank accounts should the SYRIZA party, which has promised to tear up the country’s bailout deal with the EU and IMF, score a decisive victory on Sunday.

SYRIZA leader Alexis Tsipras said the memorandum deal with Greece’s international lenders, which has helped to push the economy into a depression, would not last beyond the weekend.

“The memorandum of bankruptcy will belong to the past on Monday,” Tsipras, who has rapidly emerged from fringe politics to challenge the mainstream for power, told his last campaign rally in Athens.

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