A few months ago a new government was elected in Greece. The Socialists, who took control of the country after 5 years of right-wing administration, discovered, to their horror, that the budget deficit was twice as much as was declared by the former government. They went on and (naively) announced it to the markets. The profiteers smelled fresh blood and raced to the kill. Greek bonds were thrown to the Tartars and the cost of borrowing money skyrocketed. The EU failed to shield the weak Greek economy from the attacks. As a result it became increasingly difficult and expensive to borrow money to refund the debt and the country teeters on the brink of bankruptcy. Now the EU will probably hurry to the rescue (if Greece falls, it will probably take the Euro down with her, or at least severely harm it), even though no certain measures or economic help is announced. Germany, especially, is extremely reluctant in bailing out Greek economy. So far, only strict language and vague promises of support were uttered. In exchange for any possible help, the EU dictates Greece a series of extremely painful and strict measures, calling for austerity and sacrifices by the common people. The story has still an open ending... Reasons: -Structural inefficiency of the Eurozone. There isn't a mechanism available for facing such crisis. There are great differences between countries of the south (Greece, Portugal, Spain, Italy) and northern countries. Europe wasn't ready for a common, non-flexible (impossible to devaluate) currency, since Europe hasn't proceeded to a real unification. National interests and a continuous power struggle between members (especially Germany and France) have played a role in turning a blind eye to smaller countries "cooking up" their statistics regarding fiscal policies. Germany seeks to establish its rules to smaller countries, especially countries of the South. By making an example of unruly Greece it can terrorize other countries with similar problems, like Portugal, Spain, Italy. Many countries "cook up" their statistics. That's a common secret. Greece was the first naughty boy of the class to be caught red-handed and got crucified as an example. Greek false statistics were known to the EU for a long time, but nothing was done. I can only speculate why this was done. Was it perhaps a favour by the EU leaders to their ideological colleagues here in Greece (all conservatives)? Why all the sudden pressure when the new, socialist government was elected? -Greek governments have had a fair share of the blame. Especially the last government was criminally incompetent and laden with huge financial scandals and corruption. Money was spent thoughtlessly. Instead of using easily borrowed money to develop the country, they channeled it to their economic "friends" and huge sums were lost because of incompetence and corruption. Poor people saw no benefit to their salaries or pensions. Public health system was abandoned to decay, in favour of luxurious private super-hospitals and private health care. Public education had a similar fate, favouring private one. Great national companies, like the telecommunications (a very successful public organisation, dominating all of the Balkans), were sold to private interests (mainly German). Neoliberalism sold out Greece, leaving it poorer and weaker, an easy target for future financial attacks. -Global economy is dominated by ruthless profiteers who can easily down a prey, especially a wounded one like Greece. Once the word got out, that a smaller member of the coveted pack (the Eurozone) was hurt and that its larger relatives left it on its own, the hunt was on. Hyenas can be very persistent when set on a target. There are bets going on and huge sums to be earned in case Greece do bankrupts. And who knows? Bigger prey might fall in their clutches. Spain would be a real prize. Or Italy. Some speculate that the UK would be the next target. When the pack loses cohesion and mutual support, the hunters can work miracles.
