The Euro has been crushed over the last week or so as markets react to concerns about Greece's fiscal woes and presumed need for help from its European brethren. On February 3, the Euro traded to as high as 1.40 versus the US Dollar. This week the Euro has been flirting with 1.36 versus the US Dollar (down nearly 3%).
As European leaders search for ways to help, the Prime Minister of Greece -- George Papandreou -- has indicated that he will try to get the house in order, declaring that the government will embark on a fiscal austerity program.
Such plans have not, to put it mildly, been embraced by Greece's powerful public sector unions. Indeed, they have gone on strike (from The New York Times):
A strike by civil servants shut schools and grounded flights across Greece on Wednesday, as unions challenged cutbacks aimed at ending a government debt crisis that has shaken the entire European Union.
Air traffic controllers, customs and tax officials, hospital doctors and schoolteachers walked off the job for 24 hours to protest sweeping government spending cuts that will freeze salaries and new hiring, cut bonuses and stipends and increase the average retirement age by two years to 63.
The strike left state hospitals working with emergency staff only and disrupted national rail travel, although urban mass transport was unaffected.
''It's a war against workers and we will answer with war, with constant struggles until this policy is overturned,'' said Christos Katsiotis, a representative of a communist-party affiliated labor union.< /em>
So much for austerity...and for quick, easy solutions to a serious challenge for the European Union. A challenge, that many note, could grow if Portugal, Spain and Italy have to line up for help, too. On a broad level, sovereign default risk does not engender confidence...and we have seen the impact on various equity markets over the past week. On a narrower level, a hobbling Euro (and strengthening US Dollar) is not viewed as being supportive to commodity markets. 
