Developments in Europe.
According to Greek news outlet http://www.ekathimerini.com , the latest reports coming out of the Greek Finance Ministry show depressing, yet hardly surprising, revenue numbers. For the January-November period of this year, revenues from income taxes, value-added taxes, and paid services, among others, have decreased 9.3 percent, 5 percent, and 21.6 percent, respectively.
Besides widening the budget deficit, these developments are very likely to result in a domino effect, with strains on the federal budget also impacting Greek state government budgets; in fact, Alternate Finance Minister Filippos Sachinidis has issued a circular to all state bodies responsible for the administration of public finances, dictating that they should not spend a single euro beyond what the budget has provided for.
Even though the federal government is losing tax revenue at a critical time of much-needed funding, there is only a very slim chance that it will respond with tax hikes or the creation of new taxes. As Mr. Nikas points out, Greece's economy has reached a point where the imposing of new taxation will be extremely detrimental, especially when Greece is the nascent stages of recovery.
However, despite the gloom from Greece, there are positive developments from other areas of the shellshocked EuroZone. Italy was able to raise $3.3 billion on a 10-Year bond auction today, paying 6.98 percent. Although this is still extremely close to the taboo 7 percent threshold, it is significantly lower than the 7.56 percent Italy had to pay on an equivalent bond auction a month ago, a decrease which shows increased investor confidence in and demand for Italian bonds.