Is the end nigh?

Mahmudur Rahman It would appear that the relentless nudging of Greece towards exit from the Euro zone is nearing some sort of climax. For the time being Greece has had its voice heard but at a price. The Euro zone has agreed to a further euros (?) 108 billion to be pumped in to the ailing economy with apparently previous infusions having disappeared alarmingly quickly. There was no other option in order to retain the confidence in the European union's economy. The end of the year is likely to be more than the usual holiday for European banks who have been asked to raise a whopping ? 100 billion in capital to prepare for the second and now looming crisis in the name of Italy. In the meantime, the depositors are left to chew anxiously on their finger nails. Euro banks that invested in Greece have been told to take a 50 billion hit in terms of write-offs and the impact of that has to be felt at some stage. In a strange way, it is some form of penalty for banks, whose executives enjoyed hefty bonuses even as the world slid to recession. But as we all know banks end up laughing because it never is their money on the line. Most of these executives will spend a nervous yuletide trying to woo the impressive Chinese coffers to coughing up some more funds for investments there. China has of late been eerily silent about the goings-on in europe. Since the visit of their leader to Europe a few months ago during which deals were signed, the bottom line of which was China buying up debt in the forms of investment and providing loans, they haven't been saying much. They may well have to agree on some sort of favour in the interest of their burgeoning exports that make up such a crucial part of their growth. More important is the most staunch supporter of euro - President Nicolas Sarcozy of France. He has finally admitted that the decision to admit Greece to the euro zone was a mistake and one made without a proper consideration of the strength of its economy. What's new? It won't be the first time that the political agenda outweighed the economic one and it won't be the last. Bangladesh has cause for concern. If the Chinese make their apparel export conditional to any such investments, it hits us with a body blow with the majority of our exports heading to Europe as it does. As it is there is worry in the garments sector about the slowdown of orders including staggered delivery of pipeline ones. If the Chinese make their way through, demands will go down further even at the cost of the critical cost factor that has worked for us so far. It's time for diplomacy again-quick, thought through and incisive. (The writer can be reached at mahmudrahman@gmail.com)