Syria crisis make hundreds of thousands of children missing education

illustration of Suri'ah refugee children sitting on a mattress in an abandoned school where food and shelter is provided by local organizations for charity in the Wadi Khaled area, North of Lebanon. (INTERMEDIATE/REUTERS/Mohamed Azakir)

United Nations, New York (AFP)-riots in Syria continue to rage without control, threatening hundreds of thousands of children's education, said the UNITED NATIONS children's Fund (UNICEF) on Tuesday (5/3).

The world body add a recent assessment found that one-fifth of the school in the Middle East has suffered physical damage directly or used as a shelter for people left homeless.

UNICEF assessment shows very many schools have been destroyed, the teachers had found the presence of death, and the number has been freefall.

The political crisis erupted in March 2011 and later turned into riots and armed clashes, thus creating humanitarian crisis in parts of the Middle East.

"The educational system in Syria is the impact of the unrest," said Youssouf Abdel-Jelil, as quoted by Xinhua--which monitored Between Jakarta, Wednesday night. "Syria never proud with the quality of the school. Now the country is witnessing the achievements reached during the years of rapidly spinning 180 degrees. "

According to that assessment, one-fifth of the country's schools have suffered physical damage directly or used to accommodate persons who became refugees in their country (IDP).

In various cities of the most fierce conflict, such as in Idlib, Aleppo and Deraa, the children often can't attend school, sometimes just being present twice in a week. But in an area with a lot of IDP, crowded classes, sometimes up to 100 pupils.

The assessment, conducted in December, also found more than 110 teachers and many other teachers will no longer report to teach. In Idlib, teacher presence is nothing more than 55 percent.

Some schools have also been used by armed forces and armed groups involved in the conflict, so that parents are reluctant to send their children to school.
(C003)

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The UN Envoy-the Arab League discussed the crisis with Syria opposition leader

The U.N. Envoy for Syria-Arab League, Lakhdar Brahimi. (tvm.com)

During that meeting, they reaffirmed support for the idea of the dialogue from the opposition.

Cairo (Reuters)-a U.N. Envoy for Syria-Arab League Lakhdar Brahimi, Thursday (10/2), met with leaders of coalition of Syria in exile Moaz al-Khatib in Cairo, where they discussed plans for the next stage of the Coalition, said Egypt's official news agency, MENA.

The meeting dealt with the efforts of al-Khatib not long ago for a dialogue with the Government of Syria's President Bashar al-Assad, who is the Minister of his outline Omran Al-Zoubi said in a response on Friday that the Government is ready for dialogue with the opposition without preconditions.

During that meeting, they reaffirmed support for the idea of the dialogue from the opposition. Such meetings between the Secretary-General of the Brahimi Arab League Nabil al-Arabi in Cairo, according to the Xinhua report--monitored Reuters, in Jakarta on Monday morning.

Syria conflict has become a major topic in high-level meeting of the organisation of Islamic Cooperation (OIC), which was recently held in Egypt's capital, Cairo. On the side of the Conference, the President of Egypt Mohamed Moursi, Iran President Mahmoud Ahmadinejad and President of Turkey Abdullah Gul held a closed meeting on Wednesday about the matter.

A statement concluding a two-day OIC Summit supports the idea of the Quartet--Egypt, Iran, Turkey and Saudi Arabia--to realize "true dialogue" between Syria and the opposition coalition Government in exile in order to put an end to a conflict that is raging now.

"We all agree on an increase in efforts to end the tragedy of the people of Syria," said the President of Egypt in a speech unveiling the Moursi. He reaffirmed support for the unity of the people and the territory of Syria.

The high-level meeting endorsed talks Brahimi at the regional level as well as internationally in order to resolve the crisis and its efforts to bring about peace in mediating negotiations between Syria's Government and the opposition.

While a senior officer of the u.s. military Sunday, said that during a discussion with the Government of President Barack Obama on how to help resolve the crisis in Syria, he gave support to the idea of arming Syria guerrillas but no specific plans have ever considered.

General Martin Dempsey, the leader of the Joint Chiefs of staff, said he thinks arming guerrillas might help end the crisis more quickly and avoid ambruknya all government agencies--which could make Syria so failed State.

"The failed State is defined by the ambruknya all of the institution," said Dempsey as reported United Kingdom, Reuters news agency. "In doing so, conceptually we think of a way to prevent that from happening. Conceptually, I agree. There is now very much a hassle that we haven't been able to accomplish. "

(C003)

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Cash crisis winners and losers

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25 October 2011 Last updated at 03:59 GMT By Michael Robinson File on 4, BBC Radio 4 Not everybody has lost out in the eurozone crisis. The crisis in the eurozone may threaten the livelihoods and living standards of many, but for some it presents a golden opportunity.

In cash-starved Greece, Yannis Perrotis, the managing director of leading commercial estate agent CBRE, says while local businesses are facing significant problems, large international companies with greater financial strength are able to seize opportunities.

"They are in a better position to benefit," Mr Perrotis says, "and in most cases, they take advantage of it."

Mr Perrotis has recently secured a prime retail location in central Athens for the sportswear giant Nike. Formerly occupied by a Greek bank, the rent Nike will have to pay is barely half what it used to be.

Top international clothing brands H&M and Mango have also secured prime premises for knock-down rentals, Mr Perrotis says.

The owners of the buildings were initially reluctant to accept so large a drop in rent, he says. "But now they have come to grips with reality."

Companies in financial distress present opportunities as well.

Restructuring specialist Haris Stamoulis, the chief executive of Athens-based LEADfinance, says Greece has many good companies which are saddled with bank debts they cannot pay.

Because Greek banks have been forced to write down such debts, Mr Stamoulis says, investors can gain control of companies through buying their debts from the banks.

'Trophy assets'

"If a company owes €100m (£87m) to a bank and they cannot service it," he says, "and banks have been forced to provide for those losses, if somebody comes and offer cash for the remaining, that would be music to their ears."

Mr Stamoulis has already attracted $150m (£94m) of American backing for such deals. Plenty more, he says, is poised to follow, if and when Europe's policymakers manage to stabilise Europe's financial system.

"There's going to be a lot of people like vulture funds circling around," Mr Stamoulis says. "Many people in the US and Europe have been interested in this."

Other investment opportunities are in the offing in the shape of Greece's vast array of state-owned assets - valued at up to €125bn (£109bn).

These include the Greek national lottery - among the biggest and most profitable in the world, and a disused airport built for the 2004 Athens Olympic Games.

In the currently depressed economic conditions, Greece has been reluctant to put such trophy assets onto the market.

But with the European Commission, the IMF and the European Central Bank - collectively known as the troika - putting Greece under increasing pressure to sell state assets to help reduce its debts, new bargains are likely to appear.

But perhaps the most surprising investment opportunity of all it is to be found in the chief cause of the present crisis: Greece's €350bn (£304bn) plus pile of unpayable debt.

Crippling debt burden

BBC Radio 4's File on 4 has discovered that some hedge funds are planning to cash in on the crisis by buying Greek debt in the form of Greek government bonds.

Their strategy depends on the troika persuading banks to agree to what is called a "haircut" in the value of their holdings of such bonds.

Continue reading the main story Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money. Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget. The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics. Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers. There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes. In July 2011, Eurozone leaders and the IMF agreed to lend Greece 109bn euros ($155bn, £96.3bn) - a year after it was granted access to a 110bn euro rescue package. Eurozone ministers were worried that if Greece was to default there would be a risk of contagion to other economies. They hope the package will resolve Greece's debt crisis and shore up the euro.BACK {current} of {total} NEXT Only by reducing Greece's now crippling debt burden, the troika insists, can a continued crisis be avoided.

It is because this write-down would be voluntary on the part of bondholders that hedge funds have found an opportunity. Having bought the bonds, they can then refuse to agree to the voluntary haircut and demand payment in full when the bonds mature.

Christopher de Vrieze, who writes on sovereign debt for the specialist news service Debtwire, says some hedge funds are targeting short-term Greek bonds due to mature in March next year.

If the troika does persuade banks to agree to a voluntary write-down, Christopher de Vrieze says "Greece will be financed for another couple of years, and will be most likely to be able to pay its shorter-dated bonds."

As a result, hedge funds which refuse to agree to a write-down will demand payment in full, from funds provided to Greece under the troika rescue plan.

The deeper the voluntary haircut the troika pressures bondholders to accept, Mr de Vrieze says, the bigger the benefit to Greece, increasing its ability to meet demands from hedge funds for payment in full on their bonds.

'Free riding'

"It's a great deal for them," he says.

It is impossible to be sure how much Greek debt hedge funds have bought. There is no public register and most trades take place away from public exchanges.

Continue reading the main story

Nobody likes the idea that hedge funds or anybody makes profits out of someone else's misery, but what's the solution?”

End Quote Sharon Bowles MEP But a source in the Greek government told File on 4 that after a voluntary write-down of Greek debt was first proposed in July this year, some €20bn (£17bn) worth of Greek government bonds were bought by non-bank entities.

That includes hedge funds.

Sony Kapoor, managing director of the think tank Re-Define, has been close to the protracted negotiations over the voluntary debt write-downs.

He says hedge funds stand to make anything from 60% to 100% profit while banks, under pressure from governments and regulators, face losses.

This so-called "free riding", Mr Kapoor says, seems unfair. "Those who participate," he says, "get a raw deal compared to those who decide on a free ride."

If large profits are made by free-riding hedge funds, Mr Kapoor believes, public protest is bound to follow.

"The contrast between Greek people on the street who are losing jobs on the one hand, and the massive amounts of profit being made by often foreign vulture and hedge fund investors would be clear for everybody to see," Mr Kapoor says.

"We are going to see much larger scale protest movements in Europe once this comes out."

'Vicious cycle'

Hedge funds would not be able to profit by free riding if haircuts on Greek debt were made compulsory. Then every Greek bondholder, including hedge funds, would be forced to write down the value of their bonds and suffer losses.

But according to Simon Tilford, chief economist of the London-based think tank the Centre for European Reform, the chances of hedge funds being hit in that way are slim.

Mr Tilford says European politicians and policymakers fear the consequences of compulsory write-downs. Because they believe investors would then assume that compulsory write-downs could be applied to other countries' bonds.

"They are worried that if they compel borrowers to take haircuts, there will be a dramatic sell-off of Italian and Spanish debt," Mr Tilford says. "That would ramp up borrowing costs for those countries and compound the difficulties they're in."

If Spain and Italy were to get into a vicious cycle like Greece, Mr Tilford warns, "the future of the euro would be very much in doubt".

At the European parliament, Sharon Bowles, the British MEP who chairs the Economic and Monetary Policy committee, agrees that it is not practical to try to prevent hedge funds profiting from free riding on Greek government bonds.

"Nobody likes the idea that hedge funds or anybody makes profits out of someone else's misery," Ms Bowles says. "But what's the solution?"

Since there is undoubtedly some risk in the free-riding trades, Ms Bowles says, "It's very difficult to draw the line in regulatory terms between risk taking and that which just seems to be rather unfair."

So, while most European citizens seem set to struggle with years of gloom and austerity, it seems likely that free-riding hedge funds are poised to be among the biggest short-term winners from the crisis.

File on 4 is on BBC Radio 4 on Tuesday 25 October at 20:00 BST and Sunday 30 October at 17:00 GMT. Listen again via the Radio 4 website or download the podcast.

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Special Report: Crisis grips North Korean rice bowl

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1 of 30. Pak Su Dong, manager of the Soksa-Ri cooperative farm in the area hit by recent floods and typhoons shows damage to agricultural products in the South Hwanghae province September 29, 2011.

Credit: Reuters/Damir Sagolj

By Tim Large

Thu Oct 6, 2011 4:00pm EDT

HAEJU, North Korea, Oct 6 (AlertNet) - In a pediatric hospital in North Korea's most productive farming province, children lay two to a bed. All showed signs of severe malnutrition: skin infections, patchy hair, listless apathy.

"Their mothers have to bring them here on bicycles," said duty doctor Jang Kum Son in the Yellow Sea port city of Haeju. "We used to have an ambulance but it's completely broken down. One mother travelled 72 kilometers (45 miles). By the time they get here, it's often too late."

It's also getting late for North Korea to get the massive amount of food aid it claims to need before the harsh winter sets in. The country's dysfunctional food-distribution system, rising global commodities prices and sanctions imposed over Pyongyang's nuclear and missile programs had contributed to what appears to be a hunger crisis in the North, even before devastating summer floods and typhoons compounded the emergency.

The regime's appeals for massive food aid have gone mostly unanswered by a skeptical international community. Only 30 percent of a United Nations food aid target for North Korea has been met so far. The United States and South Korea, the two biggest donors before sanctions, have said they won't resume aid until they are satisfied the military-led communist regime won't divert the aid for its own uses and progress is made on disarmament talks.

South Korea also says the North is exaggerating the severity of its food crisis. Visiting scholars, tourists and charity workers have sent out conflicting views about it.

The U.N.'s Food and Agricultural Organization (FAO), for instance, said last month after visiting the North that "the damage was not so significant." Another U.N. body, the World Food Programme, which has a regular presence in the North, warned in March of growing hunger. The sharp divergence of views is one reason why the U.N.'s emergency relief coordinator will visit this month to assess the situation.

North Korea's Economy and Trade Information Center, part of the foreign trade ministry, invited Alertnet to see the extent of the crisis on a rare reporting trip to its rice bowl in South Hwanghae province in the southwest.

Alertnet (www.trust.org/alertnet/), a humanitarian news service run by the Thomson Reuters Foundation which covers crises worldwide, saw evidence of alarming malnutrition and damaged crops, but also signs of some promise for the coming rice harvest.

Although tightly controlled by government officials, an Alertnet reporter and Reuters photographers and video journalists were able to conduct a week-long trip into the South Hwanghae region. The visit included rare access to collective farms, orphanages, hospitals, rural clinics, schools and nurseries.

The regime's motive in granting the access appears to be to amplify its food-aid appeals. North Korean officials at first asked Alertnet to reach out to its subscriber base to mobilize help--and at one point asked the Thomson Reuters Foundation for a donation. Alertnet declined, saying all it could do is visit and report on the situation.

The picture the regime presented in South Hwanghae was largely one of chronic hunger, dire healthcare, limited access to clean water and a collapsing food-rationing system, all under a command economy that has been in crisis since the collapse of the Soviet Union 20 years ago threw North Korea into isolation.

In one orphanage in Haeju, 28 children huddled together on the floor of a small clinic, singing "We have nothing to envy" -- an anthem to North Korea's longstanding policy of juche, or complete self-reliance, that has made this one of the most closed societies on earth.

Measurements taken of each child's mid-upper arm with color-coded plastic bracelets -- a standard test for malnutrition -- showed 12 were in the orange or red danger zones, meaning some could die without proper treatment.

Nutrition experts from Medecins Sans Frontieres (MSF), who accompanied AlertNet, found similar results among children at other institutions. But they stressed their findings were not statistically representative.

At an orphanage in Hwangju town, across the provincial border in North Hwanghae province, 11 of 12 children in the clinic were critically malnourished. They looked to be no more than three or four years old, but orphanage staff insisted they were eight, citing severe stunting due to malnutrition.

"I've never seen stunting like this before, not ever -- not even in Ethiopia," said Delphine Chedorge, deputy program manager of emergencies for MSF France.

In the orphanage's kitchen, the only food for the 736 children was maize and a thin soup made of onion and radish leaves. Cooks said they had no oil, sugar or protein -- vital ingredients for adequate nutrition.

"They've had to reduce the minimum height limit for the army by 2 cm," a Western aid worker in Pyongyang said, speaking of stunting.

North Koreans on average live 11 years less than South Koreans due mainly to malnutrition, according to U.N. health indicators.

FAMINE FEARS AGAIN?

In March, the World Food Programme (WFP) estimated that 6 million North Koreans needed food aid and a third of children were chronically malnourished or stunted. By contrast, the United Nations says 4 million people face a food crisis in Somalia.

The WFP's appeal inevitably raised the specter of the mid-1990s, when years of mismanaged farm policy and natural disasters resulted in famine that some estimates said killed as many as a million people. Nobody is saying this year is anything like that -- and South Korea has said it suspects Pyongyang of exaggerating the crisis.

North Korea has relied on food aid since the mid-1990s. Critics say Pyongyang spends most of what little hard currency it earns maintaining a million-strong army and developing nuclear weapons and missiles instead of feeding its millions of malnourished people.

A savage winter that froze seeds in the ground hit early crops even before this summer's floods. In South Hwanghae, the governing People's Committee said, the cold wiped out 65 percent of the province's barley, winter wheat and potato crops, which are sown in autumn and harvested in spring.

Between late June and early August, torrential rains, successive floods and two typhoons inundated southwestern and central provinces. Hardest hit were the plains of South Hwanghae, whose sprawling, collective farms are essential food providers in a mountainous nation where only a fifth of land is arable and the climate is harsh.

Typically, the province generates about a third of the country's total cereal supply, pumping wheat, maize and rice into the Public Distribution System, on which two-thirds of the population relies.

Last year, 16 of South Hwanghae's 22 counties produced a surplus, providing precious calories for people elsewhere, especially in towns and cities where chances to fish, forage and keep household gardens are limited. The summer storms destroyed 80 percent of the province's early maize harvest, the People's Committee said.

Those figures were impossible to verify.

AlertNet saw fields buried under mud and sand washed down from higher ground, as well as broken concrete bridges and collapsed school buildings and medical centers.

"The harvest is lost, and we'll just have to turn the ground over," said a senior official with the provincial Flood Damage Rehabilitation Committee. "We don't have any tractors so we'll do it by hand."

At Soa-Ri collective farm, which was hit three times by floods, about 100 families were living under Red Cross tarpaulins amid the buckled ruins of bungalow-style homes.

An enormous tree lay prone in the muck, snapped at its base by the force of flash floods, whose power and frequency have intensified in recent years due to rampant deforestation in a country where many still need firewood for cooking.

WELLS CONTAMINATED

Jong Song Hui, 40, recalled how she was sleeping when her house started caving in, its mud bricks turned to mush by days of heavy rain. Woken by the crashing of timbers, she grabbed her two children and got out just in time.

"The only things I could save were the portraits of the Great Leaders," she said. She was referring to pictures of North Korea's founding father, Kim Il-Sung, and his now ruling son, Kim Jong-il, which adorn many walls in one of the world's most enduring personality cults. The elder Kim remains posthumously the formal head of state, proclaimed "eternal president" four years after his 1994 death.

The rains also destroyed Soa-Ri's clinic, which serves 4,790 people on the collective farm. "Living conditions are terrible," said the clinic's doctor, standing outside a dilapidated building that functioned as a substitute clinic.

"The water supply is heavily contaminated -- wells are polluted. So people are suffering diarrhea and digestive disorders. Also, it's getting colder, so people are getting pneumonia and bronchitis."

In Haeju, 40 percent of the city's 276,000 people were still without water due to damage to the mains system, forcing residents to trek 4 kilometers into the mountains to lug water from fresh streams, municipal officials said.

Teams of students and factory workers were digging to find the broken concrete pipes connecting Haeju with a reservoir almost 7 kilometers away. All the pipes would have to be replaced.

SOLDIERS GUARD CORNFIELDS

The U.N.'s top humanitarian official, Valerie Amos, will visit the country for the first time later this month to assess the country's food needs and how aid can be monitored to ensure it does go to those who need it most.

Experts have presented conflicting views about North Korea's harvests. Last week, Hiroyuki Konuma, the U.N. Food and Agriculture Organization's regional representative in Asia, said crop damage from the summer's extreme weather was "not so significant" after finishing a three-day trip to North Korea.

Ondine Ripka, a food security analyst with MSF France, said even minor natural disasters could have catastrophic consequences for vulnerable people.

"We did witness some damage in the fields," she said. "But we shouldn't forget that people are already living on the edge, and it takes very little to push them over into malnutrition."

Along pot-holed roads neatly planted with cosmos and asters, AlertNet saw acre after acre of brown, drooping cornstalks, suggesting some damage at least to South Hwanghae's maize crops.

Pak Su Dong, manager of the Soksa-Ri farm, held up a withered cob and pulled back the husk, revealing just a few yellow kernels inside.

"Since June, we had heavy rain for two months, so that's why the maize couldn't get enough nutrients to grow properly," he said. "We now expect to harvest only 15 percent of the maize output we had originally planned."

Despite the sorry-looking crops, soldiers were guarding many cornfields against raiders, keeping watch from wooden shelters with straw roofs.

FOOD AND NUCLEAR DIPLOMACY

Next April marks the 100th birthday of "Eternal President" Kim Il-sung, and skeptics accuse North Korea of hoarding food for the centennial celebrations.

South Korean officials say the North is stockpiling food ahead of a possible underground nuclear test, which would likely provoke another round of sanctions.

In August, the United States offered $900,000 in flood assistance that consisted largely of supplies such as plastic sheeting and tents, saying it carried less risk of diversion.

North Korea's closed society and fixation on weaponry have thrown up plenty of doubt over the years about its perennial food aid requests. Aid has often been intertwined with diplomacy over its nuclear and missile programs.

North Korea said in August, in the midst of its food aid appeals, it was willing to resume regional disarmament talks at an early date without preconditions.

North Korea in the past has won food aid pledges after resuming talks on its nuclear program, which have dragged on for much of the past decade. Pyongyang has conducted two nuclear tests, in October 2006 and May 2009, and is believed to have enough nuclear material for up to a dozen warheads.

South Korea halted shipments of food and fertilizer in early 2008 at the outset of South Korean President Lee Myung-bak's five-year term. He demanded progress on the disarmament talks before resuming aid.

Russia, one of the six parties to the disarmament talks, expects them to resume soon, its foreign ministry spokesman said on Wednesday.

IRRATIONAL RATIONING?

Experts have noted that North Korea could better survive natural disasters if it adopted more market-based food policies.

North Korea's Public Distribution System was the main source of food for most North Koreans until it broke down during the mid-1990s famine. Gradually, the regime allowed a limited form of commercial trading to develop. The majority of people began to rely on crude rural markets to survive.

But in 2005, the state clamped down on the market system, reverting to the PDS, which can ensure food goes to soldiers, officials, party apparatchiks and priority workers but has again proved unable to meet most people's needs, North Korean experts said.

That became evident again this year.

North Korea's standard daily food ration is 700 grams of cereals per person per day. After the harsh winter it was reduced to 400 grams, then cut further to 150 grams in June, officials said. From July it was raised back to 200 grams, where it remains -- about a third of the government's minimum standard of 573 grams.

Back in March, the World Food Programme predicted the PDS would run out of food by early summer. In fact, it didn't -- possibly because of the drastic reductions in rations. One of the tasks of the U.N. assessment mission this month is to figure out why.

AlertNet was not permitted to visit the struggling rural markets where farmers are allowed to barter goods, although a few people were seen on the roadside selling potatoes, eggs, fruit and cigarettes.

The October rice crop will soon be harvested here, and official expectations are muted.

"We're only expecting about 45 percent of the rice crop to come through," said the senior official from the South Hwanghae People's Committee.

However, a North Korean Red Cross official said he was optimistic about the rice harvest, as there had been plenty of sunshine since mid-August.

All over the province, AlertNet saw lush-looking paddies with golden-green rows swaying in the breeze. Under a balmy autumn sun, some men, women and children were beginning to reap rice, working the rows with hand-held sickles.

Visitors to the central parts of the country, including areas around Pyongyang, have also reported seeing crops in good condition.

Red flags marked paddies ready for early harvest and enormous signs proclaimed: "Let's all help the farmers!"

Some farmers used ox-drawn carts to transport produce. Not a single piece of farm machinery was seen during the trip.

Many houses were surrounded by small kitchen gardens, with climbing beans and even melons growing onto roofs. Personal plots were crammed with cabbages, radishes and other vegetables.

A woman whose house was destroyed by floods at the Soa-Ri collective farm showed the food stocks she kept in her tarpaulin tent: corn and a few green leaves.

"I had about 15 square meters by my house that I was allowed to cultivate for myself, but everything was washed away," she said. "So now I have to dig wild grass."

(AlertNet is a humanitarian news service run by Thomson Reuters Foundation. Visit www.trust.org/alertnet)

(Additional reporting by Jeremy Laurence; editing by Bill Tarrant)

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Could the Crisis in Europe Drag Down the U.S.?

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U.S. stocks sank into bear market territory Tuesday amid fears that Europe's debt crisis could morph into a major global crisis as European leaders continue to squabble over how to resolve the continent's financial troubles.

Bank stocks have been hammered over the past few days, a sign that wary investors are concerned that the crisis in Europe could spread to the United States, further battering banks and possibly sending the country spiraling into another, potentially deeper, recession.

While banks and the Federal Reserve maintain they have little direct exposure to troubled European sovereign debt, the intimately intertwined nature of the global economy means an unraveling crisis in Europe could mean catastrophe elsewhere. "It's more a concern that if [Greece defaults], how bad is the effect on Europe's banks and [what is] the connectedness to U.S. banks?" says Kate Warne, market strategist at Edward Jones.

[What Will Happen If Greece Defaults]

Europe has reached a tipping point, according to some experts. In a strange reprise of the 2008 financial crisis, a debt and banking crisis on another continent threatens to the bring the U.S. economy to its knees, only this time the country has even fewer tools to counteract it.

"The chances are about even at this point; it's as likely as not likely that a crisis of that magnitude would happen," says Sandeep Dahiya, associate professor of finance at Georgetown University's McDonough School of Business.

Whereas some of the financial crisis' potential havoc was contained by the combined efforts of the Treasury and Federal Reserve, the euro zone doesn't have the same infrastructure in place, Dahiya says. "There's nothing close to that in Europe," he says. "You don't have a central authority that is aggregating all the information and responding to it. There a lot of people with very different agendas."

Without a unified, cohesive, viable solution to its sovereign debt problem, Greece will likely default dragging Ireland and Portugal along with it. If that happens, investors' fears about the barely-there recovery in the United States petering out could be justified.

[Political Cartoons on the Economy]

The euro zone economy has already slowed to a near halt. If countries in Europe continue to limp along, that financial void could cost the United States precious growth, which, given that U.S. growth is only predicted to be barely 2 percent, is a huge drag. Combined, North America and Europe comprise more than two-thirds of the global economy. "If one of the engines is sputtering, it's hard to see how you can maintain altitude and speed," Dahiya says. "I do not see a situation where Europe is struggling and we do well."

While the absence of a viable plan to save the debt-plagued euro zone countries is troubling, the potential default for Greece isn't even the worst-case scenario. It's the collective loss of confidence that could lead to bank runs and bank failures. "Confidence is like oxygen," Dahiya says. "No one notices it when it is around, but it is very difficult to live when it is gone."

Fundamentally, the issue isn't Greece's inability to pay its debts, it's what might happen if the situation in Athens is allowed to infect other precariously positioned euro zone countries and financial institutions. "That's what policymakers are trying to avoid and they need to put barriers in place so that whatever happens in Greece doesn't spread to other countries or other financial institutions across Europe," Warne says. "But markets move quickly and policy makers move slowly, so we're getting a lot of volatility and investors worry about whether what [policymakers] are doing is enough or fast enough."

[How Obama's Deficit-Reduction Plan Could Backfire]

The bottom line : If Europe can get its act together, the global economy might be able to muddle along as it has been. If, on the other hand, Europe fails, the U.S. and perhaps the global economy could plunge into another recession.

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Greece cabinet holds crisis talks

  The government said Mr Papandreou wanted to ensure commitments were fulfilled Greek Prime Minister George Papandreou is chairing cabinet crisis talks, a day after cancelling a trip to the US amid growing fears over the debt crisis.The talks are said to focus on new austerity measures to enable Greece to secure the country's next bailout loan.
Greek newspaper To Vima said lenders had set further conditions including the dismissal of another 20,000 state employees before releasing the loan.
Mr Papandreou had planned to attend the UN General Assembly and IMF meetings.
'More likely' default
Greek media said he took the decision to return to Athens after consultations with Finance Minister Evangelos Venizelos.
The decision comes a day after eurozone ministers delayed a decision on releasing more money to Greece.
Eurozone leaders will now decide in October whether to release the next 8bn euros ($11bn; £7bn).
To Vima published a document listing 15 new measures allegedly demanded by the troika of lenders - the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF).
The newspapers said this included redundancies among civil servants - bringing the total to 100,000 - and a cut in pensions and salaries.
The Greek government is expected to run out of cash to pay for public services by mid-October if it does not receive further loans.
Euro obligation
German Finance Minister Wolfgang Schaeuble has warned that no money will be forthcoming if Greece does not stick to planned cuts in its borrowing.
"Membership in a monetary union is an opportunity, but also a heavy burden," he told German Sunday newspaper Bild am Sonntag.
"The Greeks must decide whether they want to bear this burden."
Eurozone leaders decided on a second bailout of 109bn euros for Greece at a Brussels meeting in July. It is still receiving the initial 110bn-euro bailout, agreed in May last year, in tranches.
October's loan decision will be based on assessments by the three lenders.
There are concerns they may rule that Greece has fallen behind on its spending cuts targets - the government was forced to introduce a property tax amid fears prompted by the recession that it would miss its target of capping its budget to 7.6% of GDP.
Mr Venizelos is expected to hold a teleconference with the three lenders on Monday.
Demands that Greece accelerate its austerity plans, and divisions among governments and policymakers over support for indebted eurozone members, have sparked turmoil in the financial markets.
But the head of the Eurogroup of ministers, Jean-Claude Juncker, said Greece was making "significant progress" and welcomed Athens' commitment to the austerity programme.
German Chancellor Angela Merkel is facing dissent within her governing coalition over whether Greece should be made to default on its debts.

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