Greece default on its debt
Since the near melt down in Dubai other countries have become concerned about their problems funding debt. Greece are under the spot light with concerns that it might even default on its debt as it becomes clear the government was struggling to reduce its budget deficit.
On Tuesday the new president of the European Union, Herman van Rompuy, voiced confidence in Greece's ability to address its present debt crisis.
Noting that the country faces "very substantial economic and fiscal challenges," he stated that the center-left Greek government was "fully aware of the need for decisive action."
Van Rompuy held a meeting with the Greek Prime Minister George Papandreou after which he said "I am confident that the Greek government is already taking the necessary further steps to address the situation," adding it was "a matter of common interest" to the entire EU that Athens succeeded.
Van Rompuy all but demanded that the promise to bring public spending back into line "needs to be supported by concrete and credible measures." It seems the EU is now anxious to help and encourage Greece to reform its economy and get back on its financial feet quickly, lest its high debt to GDP ratio place undue pressure on the value of the euro.
The government of Papandreou was elected on Oct. 4 2009, and has since promised to lower the country's soaring budget deficit from a currently estimated 12.7 percent of GDP in 2009 down to under the 3 percent ceiling demanded by the EU by the end of 2012.
Greece has been mired in a recession and it is not surprising building activity has dropped sharply, especially with uncertainty about the country's economic viability hanging in the air. On Tuesday it was reported that Greek construction activity, calculated by looking at new building permits, fell by 17.7 percent in October after a 12.9 percent drop the previous month. The annualised (year on year) data from the National Statistics Service (NSS) also showed building activity in the first 10 months of 2009 was down by 15.6 percent.
With people holding on to their money waiting for an increase in exchange rates, other countries continue to see a slump in the property market. Until the sterling can gain some ground on the euro we will continue to see a slump in the market.