While attention is diverted to the escalating U.S. sex scandal, guess which country is back in the news? Greece is making headlines again and unfortunately, the news is not good. Many investors expected that the indebted country would receive the next $40 billion loan installment this week, but eurozone finance ministers failed to agree on releasing the funds and will take up the decision next Tuesday.
Greece raised the money it needed to avoid default on an upcoming bond repayment, but investors are getting nervous. I know what you are thinking: I'm just trying to pay my mortgage, do I really need to worry about all of this noise in Greece and Europe? Yes, because the fate of the U.S. economic recovery and your 401(k) may hang in the balance.
It's not surprising that the five most beleaguered eurozone countries -- Italy, Spain Portugal, Greece and Cyprus -- are already mired in deep recessions. But the entire 17 country region saw GDP shrink by 0.3 percent in the second quarter and the European Union's executive commission predicts it will shrink 0.4 percent this year. In other words, the eurozone as a whole is in recession too. The ECB expects the region to grow by only 0.1 percent all of next year.