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European Debt Crisis

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European Debt Crisis
INTRODUCTION
On May 1998, Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland established the eurozone by fulfilling the necessary conditions for the adoption of the euro as their single currency. During the same period, the members of the Executive Board of the ECB were appointed. Our story begins two years later, when Greece becomes accepted as the 12th member of the eurozone countries.
In the recent past, a number of EU members, including Greece, Ireland, Portugal, Spain and Belgium, shook the global financial markets with their sovereign debt crisis. In this paper, we will primarily focus on financial crisis in Greece, discussing the current situation and exploring the root causes of the crisis. Moving along, we will discuss how a solitary monetary policy could potentially worsen Greece’s current situation by imposing constraints on solution options. Furthermore, we will discuss two sets of implications of the crisis evaluation regarding debt. The first set of implications deals with what will happen if Greece defaults on their debt, while the second set of implications deals with the actions that must be taken in order to prevent the occurrence of default. In the end, we will summarize our research and analysis about the topic.
CRISIS EXPLAINED
The “Greek financial crisis” revolves around the fact that the nation has a high level of debt and accompanied by a high probability of default. The story of the Greek financial crisis obviously coincides with the current global economic crisis; however, the events in Greece are unlike the financial events that have plagued the rest of the world. The story is twofold in that the Greek government is to blame for fraud and their poor financial practices, as well as the ECB for enabling such practices by making the cost of borrowing so low due to Germany and other more stable Eurozone nations.
While the rest of the world can point the finger of blame at

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