EU Portal .net

why,just WHY Greece ended up with $ 410 billion (!!!) public debt,and biggest problem of European Union !?

this is truly incredible for a country with such a small population…

Four reasons.

Greece is poor at collecting tax that is due, there is around €30 billion in outstanding tax according to the Greek government. This appears to stem from a combination of avoidance and over complication of tax concessions.

Greek governments have consistently over-borrowed to fund social programmes in order to gain political/electoral advantage (i.e. buy votes).

The Greek political establishment were certain that membership of the Euro club would ensure that all their debt would be underwritten.

Prior to the global credit crunch the international banks and finance houses were eager to give money and credit to almost any country or individual that asked for it with no questions asked. Now they don’t want to.

If Greece were expelled from the Euro they would probably reintroduce the Drachma at a substantial devaluation to burn a lot of the debt off then they would be supported by the IMF while forced to accept several years of harsh financial austerity made worse by the extreme social unrest that would likely accompany it which would almost certainly see a return to military government and Greece’s likely expulsion from the EU. Bit of a disaster all around really.

Eurozone Crisis: Barrroso announces EU deal with IMF to sort out Greek problems

Bust: Greece, the Euro and the Sovereign Debt Crisis (Bloomberg (UK)) $15.31 In 2001, Greece saw its application for membership into the Eurozone accepted, and the country sat down to the greatest free lunch in economic history. However, the coming years of global economic prosperity would lead to unrestrained spending, cheap borrowing, and a failure to implement financial reform, leaving the country massively exposed to a financial crisis—which duly struck. In Bu…