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Spagoodle on 06 May 2010
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yanamaster said:
Spagoodle said:
The Greeks are in a lot of trouble. This bail out gives them some time, like a couple years, but in the end they are going to have to default or restructure some of this debt. The reason they got the bail out is due to chain reaction it would cause if Greece was forced to default. Country's like Spain, who are also are running big deficit compared to their GDP would then see a run on their banks. Pretty much if Greece fails people will start to lose confidence in the Euro and everyone will take their money out the bank system in these country's and stick it in German bonds. At this point Germany is really holding the EU together, at least economically. If the Germans pull out of the Eu its going to be a disaster for for the rest of the country's in the EU.

Well all you wrote is true but here is the good part:

Greece was promised this 110b euro bailout if they pass a restructure package that would guarantee economic stability for the next years. Obviously since they received the money that means that package was passed in the parliament.

 

Personally i think that sooner or later the Eu will have to become more like the united states to make sure that a similar crisis doesn't happen again.

It all depends on Germany and France. Most of that money is coming from those two country's with the majority coming from Germany. The people of Germany are upset about this, which is understandable considering they did nothing wrong. If the people of Germany decide to vote in a new goverment that is set on removing them from the EU then you are looking at a complete collapse of the whole system. Who knows how likely that is. If this Crisis is contained in Greece then thats not going to happen, but if it spreads to Spain and Portugal I could see it happening.

I'm not sure if the EU can become like the US. When you are forced to aid other nations it can cause resentment and to be brutally honest people are less likely to favor spending money on people that are not their own.