Bust

Greece, the Euro and the Sovereign Debt Crisis

Bloomberg Press, 2011

15 min read

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A Greek tragedy: Could the country that gave democracy to the world bring down the global financial system?

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For a relatively small country, Greece has made outsized contributions to the world: mythic legends and heroes, great art and architecture, illuminating philosophers and thinkers, and the very word “democracy.” Yet the nation that invented the Greek tragedy is living its own version of one today, dealing with fatal flaws that threaten to spread its suffering to the rest of Europe and beyond. Journalist Matthew Lynn dissects the origins of Greece’s debt crisis and relates how the dream of a united Europe has led to what he predicts is the euro’s imminent downfall. His dry, witty, clever writing style provides some relief around the all-too-real events he recounts and the dramatic prospects he predicts. getAbstract recommends this modern-day tale of unfolding human tragedy that’s going to need a deus ex machina to bring catharsis and resolution.

Summary

United They Stood, Divided They Fell

In May 2010, thousands of Greeks took to the streets to protest the draconian austerity measures Greece’s economic collapse had forced their massively indebted government to adopt. But the real cause of the Greek fall had its roots in the country’s enthusiastic accession to the euro and European Monetary Union (EMU) a decade earlier.

The idea of uniting the nations of Europe politically and financially dates back many years: Napoleon Bonaparte, Victor Hugo and Winston Churchill all advocated continental monetary union. Certainly, economic justification for creating a common currency existed; much of Europe’s trade was intraregional, and unpredictable national currencies placed undue price risk on manufacturers and exporters. Politically, the need to prevent another major war like the ones that engulfed Europe during the 20th century presented a major impetus for union. The 1970s and 1980s saw a few attempts at economic coordination: The Snake and the European Monetary System (EMS) were foreign exchange mechanisms that attempted to keep European currencies within predetermined trading values. But each format failed when individual...

About the Author

Matthew Lynn is a financial journalist and columnist for Bloomberg TV and Bloomberg News. He wrote the Death Force military thriller series.

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D. B. 1 decade ago

I found this summary a good read to educate me on the history of the Euro and the problems embedded in Greece. Since Greece and now Italy are making headlines almost every day, I would recommend this abstract.

Matthew Lynn