Greece 'can't take anymore cuts' and Eurozone States 'want Greece out'

[yanamaster]

Wierd that people don't remember/know why Greece ran out of money.

It's all because Greece wanted to join the euro zone. At the turn of the century a lot of creative accounting was used by the greek government in which the actual debt was written off or exempt from publication for official statistics. This allowed Greece get their inflation, debt to gdp ratios etc down to levels to which they could apply for the euro currency.

The offset of the taken measures was that the debts weren't gone, more like postponed for some 8 to 10 years. In the meanwhile Greece had to fund massive infrastructure investments, the olympics, all this costed extra money that was obtained through raising debt.

When the crisis kicked in it was one hell of a tough break for Greece because that's when the concealed debts from earlier started kicking in again. Combined with the already tragic situation in europe at the time, the debts of Greece ballooned to disastrous sizes only to get even worse because of the ever worsening credit ratings for Greece.

But ironically, what really put the massive hurt on Greece, was how over inflated everything was before the crisis.
Prices, wages, pentions, costs of doing business, all these were the highest in Europe while the economy was nowhere near the first 7. This lead to a massive retraction of investments and businesses from foreign countries leaving Greece with even less money. If this had not happened Greece might have not been in such a bad situation now.

So now, the grand finale. Obviously any country stuck in such a situation would have defaulted on their debts and depreciated their currency to levels that would reflect the actual state of the economy. Sadly Greece can't do that with the Euro. Of course they can go back to their old currency, but that's where the shit-storm is hiding.

If Greece drops Euro, then any country within Europe will drop the currency at the first sight of trouble (Spain, Portugal,maybe even Italy), effectively plunging Europe and potentially the whole world into total financial chaos.

And that's when we'll have the great depression of the 21st century.