The Boil Must Be Lanced

Unsurprisingly, it has been confirmed that Greece will not meet it budget targets. The 2012 draft budget approved by the Greek cabinet on Sunday predicts a deficit of 8.5% of gross domestic product (GDP) for 2011, this is well short of its 7.6% target.

Markets around the world are falling, apparently they have been "surprised" by this news.

Why?

It has been obvious for months that Greece will not meet its targets and will default.

As neatly summed up in the Telegraph

"Until Greece defaults it's hard to see any resolution."

The boil must be lanced, and quickly.

Meanwhile, the Belgium bank Dexia (which ran out of cash this summer) is about to collapse/be nationalised.