Lessons From Greece

Greece, one of the oldest countries on the planet, suffers from one of the oldest problems on the planet: debt. The Greek debt debacle is playing significant havoc on the world’s financial markets. As Carmen M. Reinhart, author of a book on 800 years of world debt crises said on The New York Times Economix blog recently, “Greece casts a long shadow on the European continent because 15 other countries share a common currency with it, the euro.”

What does the euro and Greece’s debt problems have to with the American economy? Far more than we would like, as was indicated by the meltdown in the world financial markets in the first week of May. The “Crash of 2:45″ is what the May 6 market plummet is being called and it was a vivid reminder that the finances of the world are intricately connected.

The week following the market meltdowns, the European Union and the International Monetary Fund are bailing out Greece to the tune of $1 trillion. According to the Associated Press, the huge rescue package was more generous than expected and spurred a rebound in the financial markets. But like America’s bank bailout two years, it has been met with as much skepticism as praise.

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