My Fat Greek Wedding

In the latest event of this Greek drama, U.S. Treasure Secretary, Tim Geithner met Euro Zone finance ministers in Poland to discuss monetary policy to get europeans off from the edge of what lately have been called the “Abysm”. The consequences of contagion have global economic powerhouses gathering forces to jump start the greek economy.

The greek economy? why? This small country with a messy marriage with the European Union policy makers, has battled one of the most extenuated fight against speculators in the aftermath of the financial crisis. A bit of corruption, foreign banks and the always infalible International Monetary Fund (IMF) intervention; provided a lethal mix.

At the core of the problem, we have the lack of leadership from europeans policy makers to come up with a solution to end this greek episode. However, there are at stakes a couple more things than greeks in this story, french and german banks have a greater exposure to greek bonds than any bank from any other country in the EU.

While Merkel and Sarkozy were trying to figure out, how to save their banks from the siege, and their advisors tried to gain some time against the inquisitive eyes of the speculators, many EU partners showed reluctance to extend their aid to an ever indulgent group of nations with long records of fiscal mismanagement.

In the meantime the markets started to grow anxious about the resiliance of the greek economy to recover, and the default became more inminent among investors and speculators. Their only way to recoup the losses was to place their eyes into another peripherical country with ill managed fiscal accounts. 

From that point on, the domino effect dragged Ireland and Portugal into economic dispair with Spain and Italy waiting to be next in the agenda from international financiers. The lost of competitiveness among some peripheral countries due to the appreciation of the euro, depleted their abilities to tax exporting industries as consumers were demanding less beause of uncertainty.

With the third and fourth EU's economies at stake, european regulators realized that was only a matter of time for Greece to default, with a hesitant IMF negotiations kept going as to contain unwanted damages to the comunitarian economy. A fiscal reform in Europe is at the top of the international pleas, along with a global intiative against speculators.

Through a magnifying glass, the greek marriage with the euro have left them with an unemploymet rate between 16% to 22%, a projected recession for the next two years (-5% in 2011 and -3,8% in 2012) and a very bleak future to access money in the markets to finance their expenses. Masses of greek youngs are packing to move out of their country seeking for a better future in this advantegous marriage.