By PAUL KRUGMAN Published: October 23, 2011 ...at this point, Greece, where the crisis began, is no more than a grim sideshow. The clear and present danger comes instead from a sort of bank run on Italy, the euro area’s third-largest economy. Investors, fearing a possible default, are demanding high interest rates on Italian debt. And these high interest rates, by raising the burden of debt service, make default more likely.
"Since the 1974 Turkish invasion of Cyprus, Greece has spent an estimated €216bn on armaments, although I am 100% certain that in absolute terms its defence expenditure is much greater than official documents would show due to the so-called secret funds the state has access to," said Katerina Tsoukala, a Brussels-based security expert.