THE FUTURE OF THE EUROZONE. HAS THE ?NEVER ENDING? GREEK TRAGEDY REACHED ITS FINAL ACT

摘要

THIS MEDITERRANEAN COUNTRY DUMPED ITS OWN CURRENCY, THE DRACHMA, IN 2001 IN FAVOR OF THE EUROPEAN UNION'S NEW SINGLE CURRENCY, THE EURO. AS A RESULT, IT GAINED UNPRECEDENTED FOOTING IN FINANCIAL MARKETS. WITH GREEK DEBT BACKED BY THE ROCK-SOLID EURO, THE LEADERSHIP IN ATHENS RAISED BILLIONS FROM FOREIGN PENSION FUNDS AND GLOBAL BANKS AT INTEREST RATES NEARLY AS LOW AS THOSE OFFERED TO GERMANY, THE FISCALLY CONSERVATIVE TITAN OF EUROPE. FLUSH WITH EASY MONEY, GOVERNMENT SPENDING SOARED AND THE ECONOMY BOOMED. WHEN THE GLOBAL FINANCIAL MELTDOWN HIT - AND GREECE'S HIDDEN BORROWINGS CAME TO LIGHT - THE COUNTRY WAS ILL-PREPARED TO COPE WITH SUCH A DISASTER. THE DEBT LEVEL REACHED THE POINT WHERE THE COUNTRY WAS NO LONGER ABLE TO REPAY ITS LOANS, AND WAS FORCED TO ASK FOR HELP FROM ITS EUROPEAN PARTNERS AND THE IMF IN THE FORM OF MASSIVE LOANS. IN THE SHORT TERM, HOWEVER, THE CONDITIONS ATTACHED TO THESE LOANS HAVE COMPOUNDED GREECE'S WOES.