The European Union (EU) is a political and an economic organization, which has 27 members including Greece. The EU provides some privileges, freedom and easy communication in political and economical issues between the members. It has a fiscal union; the budget is shared by the members who are from developing countries like Greece. Most of the countries in the world had a recent economical and financial crisis. Greece responded to the crisis later than other countries. Partly because of this, the crisis in Greece is not over yet and they are stil finding out their limitations.
To understand Greece’s economic troubles, people should be aware of what an economic crisis is. Economic crises’ usually occurs after boom periods. They bring along unemployment and bankruptcies. Greece has economic and financial troubles because of unrestrained and irresponsible spending, cheap lending, strikes, increases in public expenditures and salaries, tax evasions and deficit spending. The total of Greece’s national debt today is $413.6 billion. In the eurozone, Greece’s capability of paying back its debts downgraded to the lowest rating because their national debt is bigger than its income.
The biggest question facing countries on their way to becoming like Greece is how are they going to handle this situation? Greece answered this question by raising the retirement age two years and increasing taxes on fuel, tobacco and alcohol. Greece also took help from the EU and IMF (International Monetary Found).
Greece’s crisis has put pressure on the euro. It is making markets nervous and countries more careful about their expenses and debts. If other countries like Portugal become like Greece, the value of the euro will keep diminishing. Greece is hardly working on repaying the debts and taking help from IMF and EU to obstruct the euro’s falling value, inhibiting fear of countries which are using euro.