The European Union was formed in the late 1940’s after World War II to stop the frequent wars between nations in Europe. Back then, it wasn’t as focused on economic goals as it was simply trying to create some stability in not having neighbors fighting each other. In it’s beginnings, there were only 6 countries. As time passed on, more countries joined.
As this video from Bloomberg will show, the history of the EU is traceable back many years, and the European Union itself is set up with some flaws in it.
It was set up to manage monetary policy, but they have no control over the fiscal policy of the member nations. The result is that countries within who are more loose with their fiscal policy, such as Greece and Italy, both suffering from debt issues, are somewhat able to depend on other countries within the Euro Zone for loans and securities.
Now, the recent troubles that have been brewing come down to this: Greece is in major doo-doo. It’s banks are deep in the red, and the government has not much money to be able to pay off it’s creditors, such as Germany. Germany is demanding some austerity in return for giving Greece loans to be able to continue to float and not completely sink. This is still only breaking the surface however.
The Greeks are looking for another bailout. The International Monetary Fund and the European Central Bank have previously loaned Greece money, and with Greece defaulting on the payment of 1.5 Billion Euro’s to the IMF, and a looming payment to the amount of 3.5 Billion Euro’s due to the ECB, Greece is in a position to skip paying out to their creditors.
That’s the surface. Now, diving deeper, we get to this, which I found very interesting. This comes from Storm Clouds Gathering News, which I would recommend to you if you’re looking for things that won’t come up in the mainstream news media when they’re discussing major stories like this. This video will explain what the mainstream news isn’t talking about:
And if you’re wondering, yes, they source very specifically, and it’s sites like The Guardian, The Wall Street Journal, and other major Internet news sites as well, which they source for everything in their video. They leave nothing out.
Call me crazy, but when countries go into debt, and it isn’t too much, then that’s one thing. In the case of Greece, when you can’t afford to pay off your creditors, but continue to call for more money given to you, there’s simply something wrong with you. The system of banking currently in place in Greece is clearly not sustainable, but bailing it out, isn’t going to help. Bailing out the banks, instead of letting the coerced and distorted hand of the market go ahead and wipe them out won’t help the country of Greece, or it’s people.
Unfortunately, the people of Greece will suffer the most. Under current Greek and EU law, the governments can raid deposits and seize them. The Greek’s pension system will most likely be raided for money to pay off creditors. They will see the Euro devalued as time moves on, and things with other countries grow worse, as it already has done with some of the news of the Greek crisis.
In short, there is no good outcome for the Greek people, or the EuroZone in whole.