1. Their economy is a mess and their public finances are a joke.
2. Most third world nations--which at this point Greece is close to approaching--they inflate their problems away.
3. This causes other issues, but they can be punted for future politicians to worry about.
4. Since Greece is part of the EU, and therefore part of the Euro, they can't.
Since the government of Greece can't use monetary methods to aid their fiscal crisis, they have to use fiscal methods. For those keeping score at home, this means firing government workers and raising taxes. In an economy already in a tailspin this is already causing a lot of unhappiness.
This is nothing terribly new--other smaller economies in Europe such as Portugal and Ireland are teetering as well. However, everyone tied together in the Euro--a concept that is barely a decade old--means that the stronger economies (read: Germany) are going to have to come up with a bailout. This is certainly a test for the European Union; many problems have been masked by a decently roaring economy and a united front against both Russia and the United States.
The bailout is called an "Austerity" package, an amusing term, I think. It's like two thousand years of philosophy and culture is about to disintegrate due to a desperate need for a 10% cut in civil service pay.
Two percent decrease in my pension contribution? Hand me the hemlock, sir.
Of course, the rational response to this is not to elect a new government or take a fresh look at the budget...it's to burn down a bank and kill three people, then blame Obama for trying to force a strong dollar to boost exports to China.
To paraphrase something I assume a relationship expert would say if I listened to relationship experts, if you hated us under right wing reactionary George Bush and you hated us under lefty Barack Obama, maybe, just maybe...it's not us.
I don't get it.
Of course, it's not like it hasn't had an impact in the US. The Dow dropped 1000 points yesterday (eventually to recover to a merely lousy day instead of a jump-from-the-window day). Partly this was because of the worries over Greece--world markets are still reeling--but because of...a typo.
Or at least that's the theory. Despite the idea that stockbrokers are on the exchange physically running around throwing papers at interns, or holding six phones to their ear with a cigarette hanging from the corner of their mouth and a pastrami on rye soaking in olive oil on a Wall Street Journal splayed out on their desk, most of it is done on computers. Complicated formulas and algorithms with years of refinement are develops to trigger sales of specific stocks. The computers do the heavy liftng while hedge fund managers and stockbrokers do whatever it is they do when they're not throwing fax machines across the room.
Well, apparently, someone fat-fingered a stock sale and all hell broke loose. Normally stable companies such as Proctor & Gamble and Accenture dropped like rocks. Computers used their intricate formulas and decided to head for the hills. Thankfully, the scary downfall lasted a relatively short time as non-HAL entities scooped up obvious bargains and the market corrected itself.
That's not a wad of penny stocks in my pants.
So, yeah, it's easy to hate on Greece and the EU, but if they blame some sausage-fingered Athenian for all their issues, we may have to give them a pass.