Greece: The Economic Black Hole

Thanks in part to the establishment of the Eurozone, Greece’s terrible economic situation has affected the rest of Europe immensely.  Greece doesn’t have a large economy itself, but Europe as a whole does.  Add to that the economic situation in the United States, and Canada’s relative economic stability is becoming more and more unsound.  We are teetering on the event horizon of the black hole that is Greece.

I don’t know what is wrong with Greeks.  They don’t seem to understand the situation; unless they embrace severe austerity, they will default.  I can’t imagine why anyone in Greece would be so outraged at the prospect of austerity.  I mean, they don't pay their taxes, and they still expect the government to pay for everything.    

Crisis in Greece

The various debt crises in Europe started in 2008 because of the worldwide late 2000's financial crisis.  Greece has suffered the worst economic crisis.

In 1974, when Greece established democracy after the right-wing military junta fell, the government began running large deficits so it could finance public sector jobs and social services in an attempt to mainstream its left-of-centre population.  Because of widespread tax evasion, corruption, and inefficient bureaucracy, Greece has had to rely upon borrowing to sustain its spending.  In recent years, the cost of borrowing has increased dramatically (because of the debt), so Greece entered an economic crisis and it could no longer sustain its level of spending.  This led to the enacting of severe austerity measures.

The citizens of Greece have been protesting these austerity measures, which has resulted in riots.  My question is, what do they want to happen?  There is no other realistic alternative to these austerity measures (at least, none that I am aware of), so why are they protesting?

The crisis in Greece presents a problem to the entire Eurozone because of how interconnected the economies of each of its member states are.  Measures designed to stabilize the Eurozone have been enacted by many other Eurozone members, most notably Germany.  In 2010, Germany made a multi-million euro payment to Greece and other financially unstable nations.  The constitutionality of the bailout is currently being contested in Germany.

The European nations of Ireland, Portugal, Spain, Belgium, and Iceland have also suffered economic crises.